A dynamic demand analysis of the United States air-passenger service

Junwook Chi and Jungho Baek

Transportation Research Part E: Logistics and Transportation Review, 2012, vol. 48, issue 4, 755-761

Abstract: This study examines the short- and long-run effects of various determinants on the demand for US air passenger-services using the Johansen cointegration analysis and a vector error-correction (VEC) model. Results show that, in the long-run, airfare, disposable income and NASDAQ have significant effects on US air travel demand. The combined short-run dynamic effects of disposable income, NASDAQ, population and airfare jointly explain changes in air passenger-miles. Finally, we find that the 9/11 terrorist attacks drop air passenger demand by 5% during 2001:Q3–2002:Q2, which in turn pushes down the seat capacity by 4%. However, it has little impact on airfare.

Keywords: Cointegrated vector autoregression; Demand for US air passenger-services; Vector error correction (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (11)

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DOI: 10.1016/j.tre.2011.12.005

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