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Price and income elasticities of demand for air transportation: Empirical evidence from US airfreight industry

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  • Chi, Junwook
  • Baek, Jungho

Abstract

This paper examines the demand for airfreight in the US as a function of real income and the price of airfreight between 1996 and 2010. Results show that a unique long-run equilibrium relationship exists between the volume of the US airfreight and the selected variables. The estimated long-run price and income elasticities indicate that US airfreight industry is price and income elastic. It is also found that income is a more powerful determinant of the long-run behavior of US airfreight industry than airfreight price.

Suggested Citation

  • Chi, Junwook & Baek, Jungho, 2012. "Price and income elasticities of demand for air transportation: Empirical evidence from US airfreight industry," Journal of Air Transport Management, Elsevier, vol. 20(C), pages 18-19.
    • Handle: RePEc:eee:jaitra:v:20:y:2012:i:c:p:18-19
    DOI: 10.1016/j.jairtraman.2011.09.005
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    Citations

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    Cited by:

    1. Alexander, David W. & Merkert, Rico, 2017. "Challenges to domestic air freight in Australia: Evaluating air traffic markets with gravity modelling," Journal of Air Transport Management, Elsevier, vol. 61(C), pages 41-52.
    2. Feng, Fenling & Zhang, Jiaqi & Liu, Chengguang, 2023. "Integrated pricing mechanism of China Railway Express whole-process logistics based on the Stackelberg game," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 609(C).
    3. Kağan Albayrak, Muhammed Bilge & Özcan, İsmail Çağrı & Can, Raif & Dobruszkes, Frédéric, 2020. "The determinants of air passenger traffic at Turkish airports," Journal of Air Transport Management, Elsevier, vol. 86(C).
    4. Akinyemi, Yingigba Chioma, 2023. "Air cargo demand in Africa: Application of cointegration and error correction modelling techniques," Journal of Air Transport Management, Elsevier, vol. 109(C).
    5. Lo, Winnie Wai Ling & Wan, Yulai & Zhang, Anming, 2015. "Empirical estimation of price and income elasticities of air cargo demand: The case of Hong Kong," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 309-324.
    6. Wang, Yue & Wong, Collin Wai Hung & Cheung, Tommy King-Yin & Wu, Edmund Yangming, 2021. "How influential factors affect aviation networks: A Bayesian network analysis," Journal of Air Transport Management, Elsevier, vol. 91(C).
    7. Yilmazkuday, Hakan, 2021. "Profit margins in U.S. domestic airline routes," Transport Policy, Elsevier, vol. 114(C), pages 245-251.
    8. Yuen, Andrew & Zhang, Anming & Hui, Yer Van & Leung, Lawrence C. & Fung, Michael, 2017. "Is developing air cargo airports in the hinterland the way of the future?," Journal of Air Transport Management, Elsevier, vol. 61(C), pages 15-25.
    9. Plakandaras, Vasilios & Papadimitriou, Theophilos & Gogas, Periklis, 2019. "Forecasting transportation demand for the U.S. market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 126(C), pages 195-214.
    10. Gaolu Zou & K. W. Chau, 2019. "Long- and Short-Run Effects of Fuel Prices on Freight Transportation Volumes in Shanghai," Sustainability, MDPI, vol. 11(18), pages 1-12, September.
    11. Yu, Shunan & Yang, Zhongzhen & Yu, Bin, 2017. "Air express network design based on express path choices – Chinese case study," Journal of Air Transport Management, Elsevier, vol. 61(C), pages 73-80.
    12. Mingli Song & Guangshe Jia & Puwei Zhang, 2020. "An Evaluation of Air Transport Sector Operational Efficiency in China based on a Three-Stage DEA Analysis," Sustainability, MDPI, vol. 12(10), pages 1-16, May.
    13. Quang Dung Truong, Hai Quang Nguyen and Dang Khoa Tran, 2020. "Elasticity of Market Demand between Modes of Transport in Vietnam by Price and Income," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(1), pages 83-96, March.

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