IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v142y2020ics1366554520307018.html
   My bibliography  Save this article

Integrated origin-based demand modeling for air transportation

Author

Listed:
  • Birolini, Sebastian
  • Cattaneo, Mattia
  • Malighetti, Paolo
  • Morlotti, Chiara

Abstract

This paper proposes an origin-based air travel demand model that assumes saturation at the origin level and explicitly accounts for substitutability between destinations. We simultaneously integrate demand generation and allocation by means of a multilevel aggregate nested logit formulation that covers the choices of whether or not to travel by air, where to travel (destination), and how to travel (itinerary). Two specifications are proposed to reflect systematic differences between lengths of haul and the bootstrap is applied to jointly address endogeneity issues and data missingness. The validity of the proposed approach is tested over the entire network of outbound air trips from Italy in 2018.

Suggested Citation

  • Birolini, Sebastian & Cattaneo, Mattia & Malighetti, Paolo & Morlotti, Chiara, 2020. "Integrated origin-based demand modeling for air transportation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    • Handle: RePEc:eee:transe:v:142:y:2020:i:c:s1366554520307018
    DOI: 10.1016/j.tre.2020.102050
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554520307018
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2020.102050?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Freund-Feinstein, Uzi & Bekhor, Shlomo, 2017. "An airline itinerary choice model that includes the option to delay the decision," Transportation Research Part A: Policy and Practice, Elsevier, vol. 96(C), pages 64-78.
    2. Weihua Guan, 2003. "From the help desk: Bootstrapped standard errors," Stata Journal, StataCorp LP, vol. 3(1), pages 71-80, March.
    3. Coldren, Gregory M. & Koppelman, Frank S., 2005. "Modeling the competition among air-travel itinerary shares: GEV model development," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(4), pages 345-365, May.
    4. Gil-Molto, Maria Jose & Hole, Arne Risa, 2004. "Tests for the consistency of three-level nested logit models with utility maximization," Economics Letters, Elsevier, vol. 85(1), pages 133-137, October.
    5. Allenby, Greg M & Rossi, Peter E, 1991. "There Is No Aggregate Bias: Why Macro Logit Models Work," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(1), pages 1-14, January.
    6. Lurkin, Virginie & Garrow, Laurie A. & Higgins, Matthew J. & Newman, Jeffrey P. & Schyns, Michael, 2017. "Accounting for price endogeneity in airline itinerary choice models: An application to Continental U.S. markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 228-246.
    7. Paula Margaretic & Christine Thomas-Agnan & Romain Doucet, 2017. "Spatial dependence in (origin-destination) air passenger flows," Papers in Regional Science, Wiley Blackwell, vol. 96(2), pages 357-380, June.
    8. Lieshout, Rogier & Malighetti, Paolo & Redondi, Renato & Burghouwt, Guillaume, 2016. "The competitive landscape of air transport in Europe," Journal of Transport Geography, Elsevier, vol. 50(C), pages 68-82.
    9. Koppelman, Frank S. & Wen, Chieh-Hua, 1998. "Alternative nested logit models: structure, properties and estimation," Transportation Research Part B: Methodological, Elsevier, vol. 32(5), pages 289-298, June.
    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. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    12. Brons, Martijn & Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2002. "Price elasticities of demand for passenger air travel: a meta-analysis," Journal of Air Transport Management, Elsevier, vol. 8(3), pages 165-175.
    13. Koppelman, Frank S. & Coldren, Gregory M. & Parker, Roger A., 2008. "Schedule delay impacts on air-travel itinerary demand," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 263-273, March.
    14. Adler, Nicole & Njoya, Eric Tchouamou & Volta, Nicola, 2018. "The multi-airline p-hub median problem applied to the African aviation market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 187-202.
    15. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
    16. Jan Brueckner & Darin Lee & Ethan Singer, 2014. "City-Pairs Versus Airport-Pairs: A Market-Definition Methodology for the Airline Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(1), pages 1-25, February.
    17. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    18. Louis Grange & Angel Ibeas & Felipe González, 2011. "A Hierarchical Gravity Model with Spatial Correlation: Mathematical Formulation and Parameter Estimation," Networks and Spatial Economics, Springer, vol. 11(3), pages 439-463, September.
    19. Luis Cadarso & Vikrant Vaze & Cynthia Barnhart & Ángel Marín, 2017. "Integrated Airline Scheduling: Considering Competition Effects and the Entry of the High Speed Rail," Transportation Science, INFORMS, vol. 51(1), pages 132-154, February.
    20. Carreira, Joana S. & Lulli, Guglielmo & Antunes, António P., 2017. "The airline long-haul fleet planning problem: The case of TAP service to/from Brazil," European Journal of Operational Research, Elsevier, vol. 263(2), pages 639-651.
    21. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
    22. 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.
    23. Juan Antonio Carrasco & Juan de Dios Ortúzar, 2002. "Review and assessment of the nested logit model," Transport Reviews, Taylor & Francis Journals, vol. 22(2), pages 197-218, January.
    24. Hensher, David A. & Greene, William H., 2002. "Specification and estimation of the nested logit model: alternative normalisations," Transportation Research Part B: Methodological, Elsevier, vol. 36(1), pages 1-17, January.
    25. Hess, Stephane & Polak, John W., 2005. "Mixed logit modelling of airport choice in multi-airport regions," Journal of Air Transport Management, Elsevier, vol. 11(2), pages 59-68.
    26. Philip G. Gayle, 2013. "On the Efficiency of Codeshare Contracts between Airlines: Is Double Marginalization Eliminated?," American Economic Journal: Microeconomics, American Economic Association, vol. 5(4), pages 244-273, November.
    27. Furuichi, Masahiko & Koppelman, Frank S., 1994. "An analysis of air travelers' departure airport and destination choice behavior," Transportation Research Part A: Policy and Practice, Elsevier, vol. 28(3), pages 187-195, May.
    28. Coldren, Gregory M. & Koppelman, Frank S. & Kasturirangan, Krishnan & Mukherjee, Amit, 2003. "Modeling aggregate air-travel itinerary shares: logit model development at a major US airline," Journal of Air Transport Management, Elsevier, vol. 9(6), pages 361-369.
    29. Hsiao, Chieh-Yu & Hansen, Mark, 2011. "A passenger demand model for air transportation in a hub-and-spoke network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 1112-1125.
    30. Adler, Nicole & Pels, Eric & Nash, Chris, 2010. "High-speed rail and air transport competition: Game engineering as tool for cost-benefit analysis," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 812-833, August.
    31. Boonekamp, Thijs & Zuidberg, Joost & Burghouwt, Guillaume, 2018. "Determinants of air travel demand: The role of low-cost carriers, ethnic links and aviation-dependent employment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 18-28.
    32. Ishii, Jun & Jun, Sunyoung & Van Dender, Kurt, 2009. "Air travel choices in multi-airport markets," Journal of Urban Economics, Elsevier, vol. 65(2), pages 216-227, March.
    33. Hakim, Md Mahbubul & Merkert, Rico, 2016. "The causal relationship between air transport and economic growth: Empirical evidence from South Asia," Journal of Transport Geography, Elsevier, vol. 56(C), pages 120-127.
    34. Wojahn, Oliver W., 2001. "Airline network structure and the gravity model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 37(4), pages 267-279, August.
    35. de Grange, Louis & Fernández, Enrique & de Cea, Joaquín, 2010. "A consolidated model of trip distribution," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(1), pages 61-75, January.
    36. Grosche, Tobias & Rothlauf, Franz & Heinzl, Armin, 2007. "Gravity models for airline passenger volume estimation," Journal of Air Transport Management, Elsevier, vol. 13(4), pages 175-183.
    37. Allroggen, Florian & Wittman, Michael D. & Malina, Robert, 2015. "How air transport connects the world – A new metric of air connectivity and its evolution between 1990 and 2012," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 80(C), pages 184-201.
    38. Wei, Wenbin & Hansen, Mark, 2005. "Impact of aircraft size and seat availability on airlines' demand and market share in duopoly markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(4), pages 315-327, July.
    39. Manoj Lohatepanont & Cynthia Barnhart, 2004. "Airline Schedule Planning: Integrated Models and Algorithms for Schedule Design and Fleet Assignment," Transportation Science, INFORMS, vol. 38(1), pages 19-32, February.
    40. Li, Tao & Wan, Yan, 2019. "Estimating the geographic distribution of originating air travel demand using a bi-level optimization model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 131(C), pages 267-291.
    41. Park, Yonghwa & Ha, Hun-Koo, 2006. "Analysis of the impact of high-speed railroad service on air transport demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(2), pages 95-104, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ding, Xiaohui & Chen, Caihua & Li, Chongshou & Lim, Andrew, 2021. "Product demand estimation for vending machines using video surveillance data: A group-lasso method," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 150(C).
    2. Avogadro, Nicolò & Pels, Eric & Redondi, Renato, 2023. "Policy impacts on the propensity to travel by HSR in the Amsterdam – London market," Socio-Economic Planning Sciences, Elsevier, vol. 87(PB).
    3. Birolini, Sebastian & Besana, Emanuele & Cattaneo, Mattia & Redondi, Renato & Sallan, Jose Maria, 2022. "An integrated connection planning and passenger allocation model for low-cost carriers," Journal of Air Transport Management, Elsevier, vol. 99(C).
    4. Birolini, Sebastian & Antunes, António Pais & Cattaneo, Mattia & Malighetti, Paolo & Paleari, Stefano, 2021. "Integrated flight scheduling and fleet assignment with improved supply-demand interactions," Transportation Research Part B: Methodological, Elsevier, vol. 149(C), pages 162-180.
    5. Redondi, Renato & Birolini, Sebastian & Morlotti, Chiara & Paleari, Stefano, 2021. "Connectivity measures and passengers’ behavior: Comparing conventional connectivity models to predict itinerary market shares," Journal of Air Transport Management, Elsevier, vol. 90(C).
    6. Birolini, Sebastian & Jacquillat, Alexandre & Cattaneo, Mattia & Antunes, António Pais, 2021. "Airline Network Planning: Mixed-integer non-convex optimization with demand–supply interactions," Transportation Research Part B: Methodological, Elsevier, vol. 154(C), pages 100-124.
    7. Gunay, Gurkan & Gokasar, Ilgin, 2021. "Market segmentation analysis for airport access mode choice modeling with mixed logit," Journal of Air Transport Management, Elsevier, vol. 91(C).
    8. Gudmundsson, S.V. & Cattaneo, M. & Redondi, R., 2021. "Forecasting temporal world recovery in air transport markets in the presence of large economic shocks: The case of COVID-19," Journal of Air Transport Management, Elsevier, vol. 91(C).
    9. Kinene, Alan & Granberg, Tobias Andersson & Birolini, Sebastian & Adler, Nicole & Polishchuk, Valentin & Skoglund, Jean-Marie, 2022. "An auction framework for assessing the tendering of subsidised routes in air transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 159(C), pages 320-337.
    10. Morlotti, Chiara & Birolini, Sebastian & Malighetti, Paolo & Redondi, Renato, 2023. "A latent class approach to estimate air travelers’ propensity toward connecting itineraries," Research in Transportation Economics, Elsevier, vol. 99(C).
    11. Abdelghany, Ahmed & Guzhva, Vitaly S., 2022. "Exploratory analysis of air travel demand stimulation in first-time served markets," Journal of Air Transport Management, Elsevier, vol. 98(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Birolini, Sebastian & Antunes, António Pais & Cattaneo, Mattia & Malighetti, Paolo & Paleari, Stefano, 2021. "Integrated flight scheduling and fleet assignment with improved supply-demand interactions," Transportation Research Part B: Methodological, Elsevier, vol. 149(C), pages 162-180.
    2. Birolini, Sebastian & Jacquillat, Alexandre & Cattaneo, Mattia & Antunes, António Pais, 2021. "Airline Network Planning: Mixed-integer non-convex optimization with demand–supply interactions," Transportation Research Part B: Methodological, Elsevier, vol. 154(C), pages 100-124.
    3. Choi, Jong Hae & Wang, Kun & Xia, Wenyi & Zhang, Anming, 2019. "Determining factors of air passengers’ transfer airport choice in the Southeast Asia – North America market: Managerial and policy implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 124(C), pages 203-216.
    4. Cheung, Tommy King-Yin & Wong, Wai-hung & Zhang, Anming & Wu, Yangming, 2020. "Spatial panel model for examining airport relationships within multi-airport regions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 133(C), pages 148-163.
    5. Morlotti, Chiara & Birolini, Sebastian & Malighetti, Paolo & Redondi, Renato, 2023. "A latent class approach to estimate air travelers’ propensity toward connecting itineraries," Research in Transportation Economics, Elsevier, vol. 99(C).
    6. Escobari, Diego, 2017. "Airport, airline and departure time choice and substitution patterns: An empirical analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 198-210.
    7. Avogadro, Nicolò & Pels, Eric & Redondi, Renato, 2023. "Policy impacts on the propensity to travel by HSR in the Amsterdam – London market," Socio-Economic Planning Sciences, Elsevier, vol. 87(PB).
    8. Abdelghany, Ahmed & Guzhva, Vitaly S., 2022. "Exploratory analysis of air travel demand stimulation in first-time served markets," Journal of Air Transport Management, Elsevier, vol. 98(C).
    9. Hsiao, Chieh-Yu & Hansen, Mark, 2011. "A passenger demand model for air transportation in a hub-and-spoke network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 1112-1125.
    10. 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.
    11. Suau-Sanchez, Pere & Voltes-Dorta, Augusto & Rodríguez-Déniz, Héctor, 2016. "Measuring the potential for self-connectivity in global air transport markets: Implications for airports and airlines," Journal of Transport Geography, Elsevier, vol. 57(C), pages 70-82.
    12. Cho, Woohyun & Windle, Robert J. & Dresner, Martin E., 2017. "The impact of operational exposure and value-of-time on customer choice: Evidence from the airline industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 455-471.
    13. Xia, Wenyi & Jiang, Changmin & Wang, Kun & Zhang, Anming, 2019. "Air-rail revenue sharing in a multi-airport system: Effects on traffic and social welfare," Transportation Research Part B: Methodological, Elsevier, vol. 121(C), pages 304-319.
    14. Cho, Woohyun & Windle, Robert J. & Dresner, Martin E., 2015. "The impact of low-cost carriers on airport choice in the US: A case study of the Washington–Baltimore region," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 81(C), pages 141-157.
    15. Teixeira, Filipe Marques & Derudder, Ben, 2021. "Spatio-temporal dynamics in airport catchment areas: The case of the New York Multi Airport Region," Journal of Transport Geography, Elsevier, vol. 90(C).
    16. Yang, Chih-Wen & Lu, Jin-Long & Hsu, Chun-Yen, 2014. "Modeling joint airport and route choice behavior for international and metropolitan airports," Journal of Air Transport Management, Elsevier, vol. 39(C), pages 89-95.
    17. Keji Wei & Vikrant Vaze, 2020. "Airline Timetable Development and Fleet Assignment Incorporating Passenger Choice," Transportation Science, INFORMS, vol. 54(1), pages 139-163, January.
    18. Allroggen, Florian & Wittman, Michael D. & Malina, Robert, 2015. "How air transport connects the world – A new metric of air connectivity and its evolution between 1990 and 2012," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 80(C), pages 184-201.
    19. 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.
    20. Birolini, Sebastian & Besana, Emanuele & Cattaneo, Mattia & Redondi, Renato & Sallan, Jose Maria, 2022. "An integrated connection planning and passenger allocation model for low-cost carriers," Journal of Air Transport Management, Elsevier, vol. 99(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:142:y:2020:i:c:s1366554520307018. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.