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Modelling air carrier choices with a Segment Specific Cross Nested Logit model

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  • Drabas, Tomasz
  • Wu, Cheng-Lung

Abstract

A number of customer segments may exist in any air travel market, differing in the willingness-to-pay, income, age, time of travel or airline preferences. Not accounting for this diversity may introduce a significant variance into any choice model. In this paper we present a Segment Specific Cross-Nested Logit with Brand Loyalty (SSCNL-BL) model that explicitly accounts for this heterogeneity. The model is estimated using data from a stated preference choice experiment conducted among Australians travelling to the United States. The resulting SSCNL-BL model performs better than the more complex Mixed Logit model without the additional computational burden.

Suggested Citation

  • Drabas, Tomasz & Wu, Cheng-Lung, 2013. "Modelling air carrier choices with a Segment Specific Cross Nested Logit model," Journal of Air Transport Management, Elsevier, vol. 32(C), pages 8-16.
    • Handle: RePEc:eee:jaitra:v:32:y:2013:i:c:p:8-16
    DOI: 10.1016/j.jairtraman.2013.04.004
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    Cited by:

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    6. Tomasz Drabas & Cheng-Lung Wu, 2020. "A market spill–recapture unconstraining model for estimating airline true demand," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(1), pages 43-60, February.
    7. Wenliang Zhou & Ziyu Zou & Naijie Chai & Guangming Xu, 2023. "Optimization of Differential Pricing and Seat Allocation in High-Speed Railways for Multi-Class Demands: A Chinese Case Study," Mathematics, MDPI, vol. 11(6), pages 1-17, March.
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    10. Freund-Feinstei, Uzi & Bekhor, Shlomo, 2017. "Airline Itinerary Choice In A Dynamic Supply Environment: Results From A Stated Preference Survey," Journal of Tourism, Sustainability and Well-being, Cinturs - Research Centre for Tourism, Sustainability and Well-being, University of Algarve, vol. 5(4), pages 400-424.
    11. Wu, Cheng-Lung & So, T.H. Hanson, 2018. "On the flight choice behaviour of business-purpose passengers in the Australian domestic air market," Journal of Air Transport Management, Elsevier, vol. 72(C), pages 56-67.
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