Reference : Accounting for price endogeneity in airline itinerary choice models
Scientific congresses and symposiums : Unpublished conference/Abstract
Business & economic sciences : Quantitative methods in economics & management
http://hdl.handle.net/2268/197098
Accounting for price endogeneity in airline itinerary choice models
English
Lurkin, Virginie mailto [Université de Liège > HEC-Ecole de gestion de l'ULg : UER > UER Opérations : Informatique de gestion >]
Garrow, Laurie [Georgia Institute of Technology > Civil Engineering > > >]
Higgins, Matthew [Georgia Institute of Technology > Scheller College of Business > > >]
Newman, Jeffrey []
Schyns, Michael mailto [Université de Liège > HEC-Ecole de gestion de l'ULg : UER > UER Opérations : Informatique de gestion >]
20-May-2016
Yes
International
AGIFORS RM Study Group
18-20 May
AGIFORS
Frankfurt
Germany
[en] Air travel demand ; Itinerary choice models ; Endogeneity
[en] This study formulates an itinerary choice model that is consistent with those used by industry and corrects for price endogeneity using a control function that uses several types of instrumental variables. We estimate our models using database of more than 3 million tickets provided by the Airlines Reporting Corporation. Results based on Continental U.S. markets for May 2013 departures show that models that fail to account for price endogeneity overestimate customers’ value of time and result in biased price estimates and incorrect pricing recommendations. Extensions to advanced discrete choice models show the importance of accounting for inter-alternative substitution for products that share similar departure times.
QuantOM
Fonds de la Recherche Scientifique (Communauté française de Belgique) - F.R.S.-FNRS
Researchers ; Professionals
http://hdl.handle.net/2268/197098
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