Combined Effects of Capacity and Time on Fares: Insights from the Yield Management of a Low-Cost Airline

Marco Alderighi, Marcella Nicolini, Claudio A. Piga

Research output: Contribution to journalArticle

25 Citations (Scopus)

Abstract

Based on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-based theories predict, it emerges that fares monotonically and substantially increase with flight occupancy. After controlling for capacity utilization, our analysis also supports time-based theories, indicating a U-shaped temporal profile over a two-month booking period, as well as a sharp increase in fares in the two weeks prior to departure.
Original languageEnglish
Pages (from-to)900-915
Number of pages16
JournalReview of Economics and Statistics
Volume94
Issue number4
Early online date28 Sep 2015
DOIs
Publication statusPublished - Oct 2015
Externally publishedYes

Fingerprint Dive into the research topics of 'Combined Effects of Capacity and Time on Fares: Insights from the Yield Management of a Low-Cost Airline'. Together they form a unique fingerprint.

  • Cite this