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Estimating fare and expenditure elasticities of demand for air travel in the U.S. domestic market

This study estimates the demand for domestic air travel services in the United
States in order to calculate the fare and expenditure elasticities of demand. We
segmented the market according to number of operating airlines, distances and traveler
types. Using Seemingly Unrelated Regression to estimate the Almost Ideal Demand
System (AIDS), we find that the expenditure and uncompensated own-fare elasticities
are around unity and consistent with the previous literature. Results reveal a tendency of
uncompensated own-fare elasticity to decrease as distance increases, and a tendency of
uncompensated own-fare elasticity to increase as number of airlines increases. Due to
few observations, business travelers' results are not reliable to make any conclusion.
Leisure travelers' results are closer to all travelers' results.

Identiferoai:union.ndltd.org:tamu.edu/oai:repository.tamu.edu:1969.1/4681
Date25 April 2007
CreatorsAlwaked, Ahmad Abdelrahman Fahed
ContributorsWiggins, Steven N.
PublisherTexas A&M University
Source SetsTexas A and M University
Languageen_US
Detected LanguageEnglish
TypeBook, Thesis, Electronic Dissertation, text
Format577952 bytes, electronic, application/pdf, born digital

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