Estimation of Airline Itinerary Choice Models Using Disaggregate Ticket Data

Airline itinerary choice models support many multi-million dollar decisions, i.e., they are used to evaluate potential route schedules. Classic models suffer from major limitations, most notably they use average fare information but to not correct for price endogeneity. We use a novel database of airline tickets to estimate itinerary choice models using detailed fare data and compare these to classic itinerary choice models that use aggregate fare information but correct for price endogeneity.