Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

Do Air-Traffic passengers make rational decisions when purchasing ancillary services? - A behavioural economic analysis -

Strey, Steve LU (2018) NEKN01 20181
Department of Economics
Abstract
The sale of ancillary services has become an important source of revenue for modern airlines. However, no research has yet been done on the purchasing behaviour of air-traffic passengers. Therefore, the aim of this empirical study is to analyse if passengers behave rationally when purchasing ancillary services or if their preferences can be manipulated by framing effects. To answer the research question, we test various framing effects for their significance by utilizing cross-section data and different evaluation methods. The results indicate that endowment, power of the free, bundle pricing, flight distance and the passengers’ age and income have a strong impact on the passengers’ willingness to pay for ancillary services. A weak... (More)
The sale of ancillary services has become an important source of revenue for modern airlines. However, no research has yet been done on the purchasing behaviour of air-traffic passengers. Therefore, the aim of this empirical study is to analyse if passengers behave rationally when purchasing ancillary services or if their preferences can be manipulated by framing effects. To answer the research question, we test various framing effects for their significance by utilizing cross-section data and different evaluation methods. The results indicate that endowment, power of the free, bundle pricing, flight distance and the passengers’ age and income have a strong impact on the passengers’ willingness to pay for ancillary services. A weak influence can be found for loss aversion and the decoy effect. (Less)
Please use this url to cite or link to this publication:
author
Strey, Steve LU
supervisor
organization
course
NEKN01 20181
year
type
H1 - Master's Degree (One Year)
subject
keywords
Ancillary Services, Airline, Framing Effect, Purchasing Behaviour
language
English
id
8958511
date added to LUP
2018-09-26 10:47:02
date last changed
2018-09-26 10:47:02
@misc{8958511,
  abstract     = {{The sale of ancillary services has become an important source of revenue for modern airlines. However, no research has yet been done on the purchasing behaviour of air-traffic passengers. Therefore, the aim of this empirical study is to analyse if passengers behave rationally when purchasing ancillary services or if their preferences can be manipulated by framing effects. To answer the research question, we test various framing effects for their significance by utilizing cross-section data and different evaluation methods. The results indicate that endowment, power of the free, bundle pricing, flight distance and the passengers’ age and income have a strong impact on the passengers’ willingness to pay for ancillary services. A weak influence can be found for loss aversion and the decoy effect.}},
  author       = {{Strey, Steve}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Do Air-Traffic passengers make rational decisions when purchasing ancillary services? - A behavioural economic analysis -}},
  year         = {{2018}},
}