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Airline schedule padding and consumer choice behavior

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  • Yimga, Jules
  • Gorjidooz, Javad

Abstract

Disclosure programs are quality assurance instruments when consumers are imperfectly informed about product quality. This study examines the On-Time Disclosure Rule for airline on-time performance which ranks airlines based on how well their flights arrive/depart on time. The program creates incentives for airlines to pad their flight schedules and artificially improve their reported on-time performance. Using a discrete choice demand model for air travel, we investigate how schedule padding affects consumer preferences. We find that schedule padding is associated with negative consumer welfare effects, reinforcing the notion of an unanticipated gaming behavior by firms that ends up harming consumer welfare.

Suggested Citation

  • Yimga, Jules & Gorjidooz, Javad, 2019. "Airline schedule padding and consumer choice behavior," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 71-79.
    • Handle: RePEc:eee:jaitra:v:78:y:2019:i:c:p:71-79
    DOI: 10.1016/j.jairtraman.2019.05.001
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    Cited by:

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    3. Brueckner, Jan K. & Czerny, Achim I. & Gaggero, Alberto A., 2021. "Airline schedule buffers and flight delays: A discrete model," Economics of Transportation, Elsevier, vol. 26.
    4. Clempner, Julio B., 2020. "Penalizing passenger’s transfer time in computing airlines revenue," Omega, Elsevier, vol. 97(C).
    5. Eufrásio, Ana Beatriz R. & Eller, Rogéria A.G. & Oliveira, Alessandro V.M., 2021. "Are on-time performance statistics worthless? An empirical study of the flight scheduling strategies of Brazilian airlines," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    6. Yimga, Jules, 2022. "Code-sharing agreements and path quality in the US airline industry," Transport Policy, Elsevier, vol. 116(C), pages 369-385.
    7. Arora, Swapan Deep & Mathur, Sameer, 2020. "Effect of airline choice and temporality on flight delays," Journal of Air Transport Management, Elsevier, vol. 86(C).
    8. Yimga, Jules, 2020. "Price and marginal cost effects of on-time performance: Evidence from the US airline industry," Journal of Air Transport Management, Elsevier, vol. 84(C).

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