Airline choice, switching costs and frequent flyerprograms

Carlsson, Fredrik,1968Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik, Enheten för miljöekonomi,Department of Economics, Environmental Economics Unit (author)

Switching costs are costs that customers face when switching from one firm to another. In markets such as the airline market where repeated purchases are common, switching costs may be substantial. In this paper we estimate the switching costs for domestic airline routes in Sweden between 1992 and 2002. In addition we also test for the determinants of switching costs. In particular we test to what extent factors such as frequent flyer programs and flag carriers have an effect on switching costs. The paper ends with a brief discussion on the welfare consequences of switching cots, where the connection between habit formation and switching costs is discussed.

Löfgren, Åsa,1972Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik, Enheten för miljöekonomi,Department of Economics, Environmental Economics Unit(Swepub:gu)xlofas (author)
Göteborgs universitetInstitutionen för nationalekonomi med statistik, Enheten för miljöekonomi (creator_code:org_t)

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