Virginie Lurkin

May 26, 2016, 11:00, Room GC B1 10 (click here for the map)

Accounting for price endogeneity in airline itinerary choice models

This study formulates an itinerary choice model that is consistent with those used by industry and corrects for price endogeneity using a control function that uses several types of instrumental variables. We estimate our models using database of more than 3 million tickets provided by the Airlines Reporting Corporation. Results based on Continental U.S. markets for May 2013 departures show that models that fail to account for price endogeneity overestimate customers' value of time and result in biased price estimates and incorrect pricing recommendations. Extensions to advanced discrete choice models show the importance of accounting for inter-alternative substitution for products that share similar departure times.


Virginie LURKIN is a Research Fellow at the Belgian National Fund for Scientific Research (FNRS) and a member of the Research Centre for Quantitative Methods and Operations Management (QuantOM) at HEC Management School of the University of Liege (ULg).Her research interests lie in the application of operations research to airline related business problems and the development and application of advanced models of air travel demand based on discrete choice methods. She holds a Bachelor degree in Business Engineering from HEC Management School (University of Liege, Belgium) and a Master Degree in Business Engineering from Solvay Business School (University of Brussels, Belgium).