Airline market share and customer service quality: A reference-dependent model

Airline market share and customer service quality: A reference-dependent model

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Article ID: iaor2003438
Country: United Kingdom
Volume: 35A
Issue: 9
Start Page Number: 773
End Page Number: 788
Publication Date: Nov 2001
Journal: Transportation Research. Part A, Policy and Practice
Authors: , ,
Keywords: service, transportation: air
Abstract:

Traditional models that explain the nature of the relationship between customer service quality and airline demand assume that the relationship can be approximated by using smooth or differentiable curves. Suzuki and Tyworth, however, recently argued that this assumption may not be valid, and that, if it is invalid, the model performance can be improved by using non-smooth functions to represent the relationship. We use their framework to develop a model that represents the relationship between service quality and market share in the airline industry and then empirically compare its performance with conventional airline demand models. The results indicate that the relationship is characterized by a non-smooth curve and that our model provides a significantly better goodness of fit than other conventional demand models.

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