Advertisement

Willingness to Pay for Airline Services: A Stated Choice Experiment

  • Pedro Telhado Pereira
  • António Almeida
  • António Gomes de Menezes
  • José Cabral Vieira
Chapter

Introduction

It is widely recognized that airlines are increasingly exposed to fierce levels of competition across all market segments, especially in the tourism segment (Gilbert and Wong 2003). Hence, it comes as no surprise that airlines have been devoting increasing attention to service differentiation strategies that seek to cater to the heterogeneous preferences of passengers (Rose et al. 2005). As a result, there is a growing body of research on stated preferences (SP) discrete choice models that are used to elicit passengers’ preferences.

As Hensher et al. (2001) argue, revealed preferences (RP) data are limited in that they are applicable in explaining current passenger choices, but are a risky domain within which to assess the potential gains from changes in fares and service levels well outside the combinations observed. Stated choice (SC) experiments have become a very popular workhorse to extend the domain of choice as defined by the attributes of alternatives through...

Keywords

State Choice Related Reason Heterogeneous Preference Stated Preference Data Fare Class 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgments

We thank support from Interreg III-B, MOVIECAM Project.

References

  1. Adler T, Falzarano C, Spitz G (2005) Modelling service trade-offs in air itinerary choices. Transport Res Rec 1915:20–26CrossRefGoogle Scholar
  2. Basar, G., Bhat C. (2004) A Parameterized Consideration Set model for airport choice: an application to the San Francisco bay area. Transport Res B: Methodol 38(10):889–904CrossRefGoogle Scholar
  3. Cao X, Mokhtarian P (2005a) How do individuals adapt their personal travel? A conceptual exploration of the consideration of travel-related strategies. Transp Policy 12(3):199–206CrossRefGoogle Scholar
  4. Cao X, Mokhtarian P (2005b) How do individuals adapt their personal travel? Objective and subjective influences on the consideration of travel-related strategies for San Francisco Bay Area commuters. Transp Policy 12(4):291–302CrossRefGoogle Scholar
  5. Dutta M, Banerjee S, Husain Z (2007) Untapped demand for heritage: A contingent valuation study of Prinsep Ghat, Calcutta. Tourism Manage 28(1): 83–95CrossRefGoogle Scholar
  6. Fowkes A, Wardman M (1988) The design of stated preference travel choice experiments with special reference to interpersonal taste variations. J Transp Econ Policy 22(1):27–44Google Scholar
  7. Gilbert D, Wong R (2003) Passenger expectations and airline services: a Hong Kong based study. Tourism Manage 24(5):519–532CrossRefGoogle Scholar
  8. Greene W (2003) Econometric analysis. Prenctice Hall, New JerseyGoogle Scholar
  9. Hensher D, Stopher P, Louviere J (2001) An exploratory analysis of the effect of numbers of choice sets in designed choice experiments: An airline choice application. J Air Transp Manage 7(6):373–379CrossRefGoogle Scholar
  10. Hess S, Adler T, Polak J (2006) Modelling airport and airline choice behaviour with the use of stated preferences survey data. Mimeo, Imperial College LondonGoogle Scholar
  11. Hess S, Polak J (2005a) Accounting for random taste heterogeneity in airport-choice modelling. Transport Res Rec 1915:36–43CrossRefGoogle Scholar
  12. Hess S, Polak J (2005b) Mixed logit modelling of airport choice in multi-airport regions. J Air Transp Manage 11(2):59–68CrossRefGoogle Scholar
  13. Hess S, Polak J (2005c) Exploring the potential for cross-nesting structures in airport- choice analysis: a case study of the Greater London area. Transport Res E: Log 42(2):63–81CrossRefGoogle Scholar
  14. Kelly J, Haider W, Williams P, Englund K (2006) Stated preferences of tourists for eco-efficient destination planning options. Tourism Manage (in press)Google Scholar
  15. Kim S, Wong K, Cho M (2007) Assessing the economic value of a world heritage site and willingness-to-pay determinants: a case of Changdeok Palace. Tourism Manage 28(1):317–322CrossRefGoogle Scholar
  16. Louviere J, Hensher D, Swait J (2000) Stated choice methods: analysis and applications. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  17. McFadden D (1974) The measurement of urban travel demand. J Public Econ 3(4):303–328CrossRefGoogle Scholar
  18. Pels E, Nijkamp P, Rietveld P (2001) Airport and airline choice in a multi-airport region: an empirical analysis for the San Francisco bay area. Reg Stud 35(1):1–9CrossRefGoogle Scholar
  19. Pels E, Nijkamp P, Rietveld P (2003) Access to and competition between airports: a case study for the San Francisco bay area. Trans Res A: Policy Pract 37(1):71–83CrossRefGoogle Scholar
  20. Rose J, Hensher D, Greene W (2005) Recovering costs through price and service differentiation: accounting for exogenous information on attribute processing strategies in airline choice. J Air Transp Manage 11(6):400–407CrossRefGoogle Scholar
  21. Street D, Burgess L, Louviere L (2005) Quick and easy choice sets: constructing optimal and near optimal stated choice experiments. Int J Res Mark 22(4):459–470CrossRefGoogle Scholar

Copyright information

© Physica-Verlag Heidelberg 2009

Authors and Affiliations

  • Pedro Telhado Pereira
    • 1
  • António Almeida
    • 1
  • António Gomes de Menezes
    • 2
  • José Cabral Vieira
    • 2
  1. 1.Department of Management and EconomicsUniversity of Madeira and CEEAplAFunchalPortugal
  2. 2.Department of Management and EconomicsUniversity of Madeira and CEEAplAPonta DelgadaPortugal

Personalised recommendations