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The Sky is the Limit: Assessing Aircraft Market Diffusion with Agent-Based Modeling

Author

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  • Liu, Xueying

    () (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Madlener, Reinhard

    () (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

This paper presents an adapted agent-based model for the diffusion of new aircraft model series. Expanding on the classical economic decision framework, where investment decision-making is entirely based on profitability, our holistic modeling approach takes into account profitability, flexibility, as well as the environmental impact of new aircraft model series in the adoption decision process. Technical parameters such as the range and maximum take-off weight of an aircraft model series, various emissions of the aircraft engine, as well as daily operational data, are used to calibrate the model. In validation, our model produces results that are comparable to data on the market diffusion of an existing aircraft model series, the Boeing 737-500. This result shows the applicability of our model, which can also subsequently be used on aircraft with new generations of technologies. Our simulation shows that a price reduction or a decrease in emissions could lead to more adoption and faster diffusion. Furthermore, our modeling approach demonstrates that a holistic framework to include not only profitability but also flexibility and environmental impact can be helpful when modeling the investment decision-making process.

Suggested Citation

  • Liu, Xueying & Madlener, Reinhard, 2019. "The Sky is the Limit: Assessing Aircraft Market Diffusion with Agent-Based Modeling," FCN Working Papers 16/2019, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  • Handle: RePEc:ris:fcnwpa:2019_016
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    References listed on IDEAS

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    Cited by:

    1. Wolff, Stefanie & Madlener, Reinhard, 2020. "Willing to Pay? Spatial Heterogeneity of e-Vehicle Charging Preferences in Germany," FCN Working Papers 9/2020, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    2. Hellwig, Robert & Atasoy, Ayse Tugba & Madlener, Reinhard, 2020. "The Impact of Social Preferences and Information on the Willingness to Pay for Fairtrade Products," FCN Working Papers 6/2020, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    3. Liu, Xueying & Madlener, Reinhard, 2019. "Get Ready for Take-Off: A Two-Stage Model of Aircraft Market Diffusion," FCN Working Papers 15/2019, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).

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    More about this item

    Keywords

    Transportation economics; Technological diffusion; Agent-based modeling; Aircraft;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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