Modeling and testing the “two-step” decision process of travelers in airport and airline choices

Abstract

This paper develops and estimates a nested logit model of airport–airline choice that incorporates the “two-step” decision process of air travelers. The model assumes that a traveler first eliminates certain choice alternatives that do not satisfy his/her minimum acceptable standards (first step), and then chooses the utility-maximizing alternative from the set of screened choice alternatives (second step). The model is calibrated by using the survey data collected in the USA (central Iowa). The results imply that the “two-step” choice model may fit the observed data significantly better than the conventional “one-step” choice models.