Air travel choices in multi-airport markets
AbstractWe study how air travel consumers departing from a multi-airport region trade-off across airport and airline supply characteristics. We empirically investigate this trade-off by estimating a weighted conditional logit model of airport-airline choice, using survey data on travels departing from one of three San Francisco Bay Area airports and arriving at one of four airports in greater Los Angeles in October 1995. Non-price characteristics like airport access time, airport delay, flight frequency, the availability of particular airport-airline combinations, and early arrival times are found to strongly affect choice probabilities. We calculate marginal effects and counterfactual scenarios to compare the values of these characteristics among each other and across traveler type. In order to examine the robustness of the conditional logit model, we estimate a mixed logit model, and find that the results are similar. We attribute the similarity to our strictly defined travel market and to our distinction between leisure and business travelers, thus controlling for two important sources of consumer heterogeneity. We consider the implications of our empirical findings on vertical integration between airlines and airports, on the effectiveness of "airport dominance," and on the competitive effect of entry by low cost carriers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Urban Economics.
Volume (Year): 65 (2009)
Issue (Month): 2 (March)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622905
Airports Airlines Air travel demand Discrete choice;
Other versions of this item:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wooldridge, Jeffrey M., 2001. "Asymptotic Properties Of Weighted M-Estimators For Standard Stratified Samples," Econometric Theory, Cambridge University Press, vol. 17(02), pages 451-470, April.
- Berry, Steven T, 1992. "Estimation of a Model of Entry in the Airline Industry," Econometrica, Econometric Society, vol. 60(4), pages 889-917, July.
- Van Dender, Kurt, 2007. "Determinants of fares and operating revenues at US airports," Journal of Urban Economics, Elsevier, vol. 62(2), pages 317-336, September.
- Evans, William N & Kessides, Ioannis N, 1993. "Localized Market Power in the U.S. Airline Industry," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 66-75, February.
- David Starkie, 2008. "The Airport Industry in a Competitive Environment: A United Kingdom Perspective," OECD/ITF Joint Transport Research Centre Discussion Papers 2008/15, OECD Publishing.
- Basar, Gözen & Bhat, Chandra, 2004. "A parameterized consideration set model for airport choice: an application to the San Francisco Bay Area," Transportation Research Part B: Methodological, Elsevier, vol. 38(10), pages 889-904, December.
- Hess, Stephane & Adler, Thomas & Polak, John W., 2007. "Modelling airport and airline choice behaviour with the use of stated preference survey data," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(3), pages 221-233, May.
- Berry, Steven T, 1990. "Airport Presence as Product Differentiation," American Economic Review, American Economic Association, vol. 80(2), pages 394-99, May.
- Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Access to and competition between airports: a case study for the San Francisco Bay area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(1), pages 71-83, January.
- Christopher Mayer & Todd Sinai, 2003. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil," American Economic Review, American Economic Association, vol. 93(4), pages 1194-1215, September.
- Brueckner, Jan K & Spiller, Pablo T, 1994. "Economies of Traffic Density in the Deregulated Airline Industry," Journal of Law and Economics, University of Chicago Press, vol. 37(2), pages 379-415, October.
- Michael Mazzeo, 2003. "Competition and Service Quality in the U.S. Airline Industry," Review of Industrial Organization, Springer, vol. 22(4), pages 275-296, June.
- Manski, Charles F & Lerman, Steven R, 1977. "The Estimation of Choice Probabilities from Choice Based Samples," Econometrica, Econometric Society, vol. 45(8), pages 1977-88, November.
- Volodymyr Bilotkach & Yuriy Gorodnichenko & Oleksandr Talavera, 2010.
"Sensitivity of Prices to Demand Shocks: A Natural Experiment in the San Francisco Bay Area,"
University of East Anglia Applied and Financial Economics Working Paper Series
004, School of Economics, University of East Anglia, Norwich, UK..
- Bilotkach, Volodymyr & Gorodnichenko, Yuriy & Talavera, Oleksandr, 2012. "Sensitivity of prices to demand shocks: A natural experiment in the San Francisco Bay Area," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(7), pages 1137-1151.
- Paul Koster & Eric Kroes & Erik T. Verhoef, 2010. "Travel Time Variability and Airport Accessibility," Tinbergen Institute Discussion Papers 10-061/3, Tinbergen Institute.
- KUPFER, Franziska & KESSELS, Roselinde & GOOS, Peter & VAN DE VOORDE, Eddy & VERHETSEL, Ann, 2013. "A discrete choice approach for analysing the airport choice for freighter operations in Europe," Working Papers 2013028, University of Antwerp, Faculty of Applied Economics.
- Zhang, Anming & Fu, Xiaowen & Yang, Hangjun (Gavin), 2010. "Revenue sharing with multiple airlines and airports," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 944-959, September.
- Clifford Winston, 2013. "On the Performance of the U.S. Transportation System: Caution Ahead," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 773-824, September.
- Christiaan Behrens & Eric Pels, 2009. "Intermodal Competition in The London-Paris Passenger Market: High-Speed Rail and Air Transport," Tinbergen Institute Discussion Papers 09-051/3, Tinbergen Institute.
- Grubesic, Tony H. & Wei, Fangwu, 2012. "Evaluating the efficiency of the Essential Air Service program in the United States," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(10), pages 1562-1573.
- Behrens, Christiaan & Pels, Eric, 2012. "Intermodal competition in the London–Paris passenger market: High-Speed Rail and air transport," Journal of Urban Economics, Elsevier, vol. 71(3), pages 278-288.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.