Estimation of consumer demand on the air transport market

Thesis: Nowadays one of peculiarities of the liberalized airline market is a huge divergence of ticket prices for the same flights. Mostly it reflects the companies' being unable to easily change the volumes of production or/and store them. The development and use of the yield management models (seat allocation models) have centered on airlines offering a variety of different types of fares for travel on the same flight. The goal of this dissertation is to construct a number of economic models to explain the price dispersion on the airline market from the different points of view. In Part 3, I create a direct price mode! which explains how different product and consumer characteristics influence the price level. It is shown how different attributes like the moment of ticket reservation, ticket class, weekday of the departure and number of coupons define the price and how it corresponds to the consumer characteristics (gender, income, age, etc.). Part 4 is devoted to the differences of the price level from the competition point of view. In a strategic game where firms compete against each other the set of rationalizable strategies for each player entails ail the best responses to the others' decisions. This chapter proposes an empirical test of the existence of the unique Nash equilibrium in a Cournot oligopoly. In Part 5 I treat an airline passenger market as a market with the product differentiation and apply a multinomial logit model to calculate price elasticities. The logit model (with a special focus on the consumers heterogeneity) estimates how the different product characteristics influence the market shares.

Author(s)

Alexandra Belova

Date of publication
  • 2018
Keywords
  • Airlines
  • Competition
  • Demand
  • Cournot
  • Nash equilibrium
  • Price policies
  • Costs
  • Hedonic price function
  • Price elasticities
Issuing body(s)
  • Université Panthéon-Sorbonne – Paris I
Date of defense
  • 19/12/2018
Thesis director(s)
  • Philippe Gagnepain
Version
  • 1