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You (expect to) get what you pay for: A system approach to delay, fare, and complaints

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  • Bhadra, Dipasis

Abstract

In this paper, an analytical framework integrating delay, fare, and complaints with passenger air travel has been laid out. Examining aggregate monthly data for US domestic air travel, we have identified causal relationships among fare, complaints, and levels of delay. An analytical framework is proposed that formalizes these relationships in an integrated manner. This integrated framework is then estimated in a set of simultaneous equations by using 118Â months of data from January 1997 to October 2006. Results show that complaints are influenced by levels of delays. However, complaints are positively influenced by average yield. These findings lead us to support the central hypothesis that complaints are responsive to levels of delays, but they tend to vary according to fare. That is, air travelers are less likely to complain in return for lower fares, even when faced with the same or even higher levels of delays. These findings have important policy implications, including the passengers' bill of rights and regulator's choice between market and operational performances.

Suggested Citation

  • Bhadra, Dipasis, 2009. "You (expect to) get what you pay for: A system approach to delay, fare, and complaints," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(9-10), pages 829-843, November.
  • Handle: RePEc:eee:transa:v:43:y:2009:i:9-10:p:829-843
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    References listed on IDEAS

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    1. Severin Borenstein, 1992. "The Evolution of U.S. Airline Competition," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 45-73, Spring.
    2. Forbes, Silke J., 2008. "The effect of air traffic delays on airline prices," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1218-1232, September.
    3. Severin Borenstein, 1989. "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 344-365, Autumn.
    4. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
    5. 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.
    6. 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.
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    Cited by:

    1. Rothbauer, Julia & Sieg, Gernot, 2010. "Quality standards for passenger trains: Political majorities and environmental costs," Economics Department Working Paper Series 8, Technische Universität Braunschweig, Economics Department.
    2. Seo, Kwanglim & Moon, Joonho & Lee, Seoki, 2015. "Synergy of corporate social responsibility and service quality for airlines: The moderating role of carrier type," Journal of Air Transport Management, Elsevier, vol. 47(C), pages 126-134.
    3. Wittman, Michael D., 2014. "Are low-cost carrier passengers less likely to complain about service quality?," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 64-71.
    4. Sternberg, Alice & Carvalho, Diego & Murta, Leonardo & Soares, Jorge & Ogasawara, Eduardo, 2016. "An analysis of Brazilian flight delays based on frequent patterns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 282-298.

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