Airline on-time performance and its effects on consumer choice behavior
Research in Transportation Economics, 2017, vol. 66, issue C, 12-25
Perhaps, owing to the unavailability of delay data on passengers’ flight routing, a challenge in air travel demand estimation is the examination of consumer response to flight delay within an origin-destination framework. An interesting but unanswered question is: how does air travel delay at various airports along a given itinerary affect consumer choice behavior? Using a methodology that enables us to match airline on-time performance data to passenger itinerary and estimating a discrete choice demand model, this paper finds that increases in flight delay negatively impact the likelihood of choosing a product and that welfare costs of delay to consumers may be substantial. These results are robust across different measures of on-time performance and irrespective of market hauls.
Keywords: Airlines; Product quality; On-time performance; Willingness to pay; Discrete choice demand model; Nested logit (search for similar items in EconPapers)
JEL-codes: L13 L93 (search for similar items in EconPapers)
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