The Review of Economics and Statistics Vol. 97 No. 4 2015
Combined Effects of Capacity and Time on Fares: Insights from the Yield Management of a Low-Cost Airline
open access
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.
- DOI
- 10.1162/rest_a_00451
- Volume
- 97
- Issue
- 4
- Pages
- 900-915
- Language
- en
- Sources
- openalex crossref