Estimating dynamic demand for airlines

Authors

Diego Escobari, The University of Texas Rio Grande ValleyFollow

Document Type

Article

Publication Date

7-2014

Abstract

This paper uses an original panel dataset with posted prices and sales to estimate a dynamic demand. We find that consumers become more price sensitive as time to departure nears which is consistent with having lower valuations. This result provides empirical support to a key theoretical implication in Deneckere and Peck (2012)—high-valuation consumers purchase earlier. We also find that the number of active consumers increases closer to departure.

Highlights

• We use an original dataset with posted prices and sales to estimate a dynamic demand.

• The estimates are consistent with agents forming expectations.

• We find that high-valuation consumers purchase earlier.

• The results show that the number of active consumers increases closer to departure.

Comments

Original published version available at https://doi.org/10.1016/j.econlet.2014.04.012

Recommended Citation

Escobari, Diego. "Estimating dynamic demand for airlines." Economics Letters 124.1 (2014): 26-29. https://doi.org/10.1016/j.econlet.2014.04.012

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Publication Title

Economics Letters

DOI

10.1016/j.econlet.2014.04.012