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Air Travel Choices in Multi-Airport Markets

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Author Info

  • Jun Ishii

    ()
    (Department of Economics, University of California-Irvine)

  • Sunyoung Jun

    ()
    (Department of Economics, University of California-Irvine)

  • Kurt Van Dender

    ()
    (Department of Economics, University of California-Irvine)

Abstract

We estimate a conditional logit model to measure the impact of airport and airline supply characteristics on the air travel choices of passengers 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. Marginal effects and counterfactual scenarios suggest that changes access in times affect travel choices more than changes in travel delays, and that the preferred airport differs by passenger 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.

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File URL: http://www.economics.uci.edu/files/economics/docs/workingpapers/2005-06/Ishii-22.pdf
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Bibliographic Info

Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 050622.

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Length: 25 pages
Date of creation: Feb 2006
Date of revision:
Handle: RePEc:irv:wpaper:050622

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Keywords: Airports; Airlines; Air travel demand; Discrete choice;

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  1. Berry, Steven T, 1990. "Airport Presence as Product Differentiation," American Economic Review, American Economic Association, vol. 80(2), pages 394-99, May.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. Berry, Steven T, 1992. "Estimation of a Model of Entry in the Airline Industry," Econometrica, Econometric Society, vol. 60(4), pages 889-917, July.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
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Cited by:
  1. 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.
  2. 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.
  3. Paul Koster & Eric Kroes & Erik T. Verhoef, 2010. "Travel Time Variability and Airport Accessibility," Tinbergen Institute Discussion Papers 10-061/3, Tinbergen Institute.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. Johnson, Daniel & Hess, Stephane & Matthews, Bryan, 2014. "Understanding air travellers' trade-offs between connecting flights and surface access characteristics," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 70-77.
  9. Hazledine, Tim & Bunker, Rory, 2013. "Airport size and travel time," Journal of Air Transport Management, Elsevier, vol. 32(C), pages 17-23.
  10. 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.

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