Airport, airline and departure time choice and substitution patterns: An empirical analysis

Diego Escobari

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses the random-coefficients logit methodology that controls for potential endogeneity of prices and allows for general substitution patterns to estimate various demand systems. The estimation takes advantage of an original ticket-level revealed preference data set on travels from the New York City area to Toronto that contains prices and characteristics of not only flight choices but also of all non-booked alternative flights. Consistent with having higher valuations, our results show that travelers buying closer to departure have a higher utility of flying. Moreover, consumers' heterogeneity decreases as the flight date nears. At the carrier level, we identify which carriers have more price-sensitive consumers and which carriers face greater competition. In addition, the results suggest that our multi-airport metropolitan area can be considered as a single market and that JFK and Newark are relatively closer substitutes. Overall, consumers are more willing to switch to alternative carriers than between airports or departure times.

Keywords: Airline choice; Airport choice; Departure time choice; Substitution patterns; Airline demand; Elasticities (search for similar items in EconPapers)
JEL-codes: C33 C36 D12 D40 L93 R41 (search for similar items in EconPapers)
Date: 2017-06-12
New Economics Papers: this item is included in nep-com, nep-dcm, nep-ind, nep-mkt and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Journal Article: Airport, airline and departure time choice and substitution patterns: An empirical analysis (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:79857

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