Airline Vs Market Vs National Elasticities.
Some of the studies supported the concept that the demand elasticity faced by an individual airline is higher than that faced by the whole market. For example, Oum, Zhang, and Zhang (1993) estimated firm-specific elasticities in the U.S. and estimated values ranging from -1.24 to -2.34, while studies estimating market or route elasticities ranged from -0.6 to -1.6. In contrast, Alperovich and Machnes (1994) and Njegovan (2006) used national-level measures of air travel in Israel and the UK respectively and produced even lower elasticity values (-0.27 and -0.7, respectively).
Airline Vs Market Vs National Elasticities.Some of the studies supported the concept that the demand elasticity faced by an individual airline is higher than that faced by the whole market. For example, Oum, Zhang, and Zhang (1993) estimated firm-specific elasticities in the U.S. and estimated values ranging from -1.24 to -2.34, while studies estimating market or route elasticities ranged from -0.6 to -1.6. In contrast, Alperovich and Machnes (1994) and Njegovan (2006) used national-level measures of air travel in Israel and the UK respectively and produced even lower elasticity values (-0.27 and -0.7, respectively).
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