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Accidents airline safety perceptions and consumer demand

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  • Jay Squalli
  • Mohsen Saad

Abstract

This paper assesses the impact of perceptions about the safety level of airlines on enplanement. Consumer perceptions are specified with a Poisson distribution that updates over time. Using two different empirical specifications via a pooled generalized least squares procedure with fixed effects; we find no statistical evidence of a correlation between the perceived level of safety and enplanement. However, under an alternative specification in which the severity levels of accidents are ranked, we find that safety perceptions about accidents with minor injuries have no statistically significant impact on enplanement, while perceptions about accidents with serious injuries and fatalities lead to cumulative decreases in enplanement. Copyright Academy of Economics and Finance 2006

Suggested Citation

  • Jay Squalli & Mohsen Saad, 2006. "Accidents airline safety perceptions and consumer demand," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 30(3), pages 297-305, September.
    • Handle: RePEc:spr:jecfin:v:30:y:2006:i:3:p:297-305
    DOI: 10.1007/BF02752736
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    1. Jay Squalli, 2005. "Do consumers have imperfect recollection about airline safety?," Applied Economics Letters, Taylor & Francis Journals, vol. 12(3), pages 169-176.
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    Cited by:

    1. Kort, Peter & Lavrutich, Maria & Nunes, Cláudia & Oliveira, Carlos, 2023. "Preventive investment, malfunctions and liability," International Journal of Production Economics, Elsevier, vol. 263(C).
    2. Squalli, Jay, 2009. "Restorative advertising in the airline sector," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 47-51.
    3. Zotova, Irina, 2017. "Post-crash airline pricing: A case study of Alaska Airlines Flight 261," Economics of Transportation, Elsevier, vol. 10(C), pages 18-22.

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