Modelling air carrier choices with a Segment Specific Cross Nested Logit model

Tomasz Drabas and Cheng-Lung Wu

Journal of Air Transport Management, 2013, vol. 32, issue C, 8-16

Abstract: A number of customer segments may exist in any air travel market, differing in the willingness-to-pay, income, age, time of travel or airline preferences. Not accounting for this diversity may introduce a significant variance into any choice model. In this paper we present a Segment Specific Cross-Nested Logit with Brand Loyalty (SSCNL-BL) model that explicitly accounts for this heterogeneity. The model is estimated using data from a stated preference choice experiment conducted among Australians travelling to the United States. The resulting SSCNL-BL model performs better than the more complex Mixed Logit model without the additional computational burden.

Keywords: Cross-nested choice model; Market segmentation; Brand loyalty; Latent class models (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:32:y:2013:i:c:p:8-16

DOI: 10.1016/j.jairtraman.2013.04.004

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