Accidents airline safety perceptions and consumer demand

Jay Squalli and Mohsen Saad ()

Journal of Economics and Finance, 2006, vol. 30, issue 3, 297-305

Abstract: This paper assesses the impact of perceptions about the safety level of airlines on enplanement. Consumer perceptions are specified with a Poisson distribution that updates over time. Using two different empirical specifications via a pooled generalized least squares procedure with fixed effects; we find no statistical evidence of a correlation between the perceived level of safety and enplanement. However, under an alternative specification in which the severity levels of accidents are ranked, we find that safety perceptions about accidents with minor injuries have no statistically significant impact on enplanement, while perceptions about accidents with serious injuries and fatalities lead to cumulative decreases in enplanement. Copyright Academy of Economics and Finance 2006

Date: 2006
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DOI: 10.1007/BF02752736

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