Lower Fares Research Articles

The implications of social exclusion and low material resources on children's satisfaction with life domains: A study of 12 year-olds in 13 countries

This cross-national study tests how children who live under conditions of low material resources and social exclusion fare in their views of three life domains: Home and family, Friends and relationships and Self. Addressing the limitations of income measure, especially for children, the study uses two recently developed child-centered measures for child socioeconomic disadvantage (Gross-Manos, in press), in a sample of 12years-olds (N=15,836) from 13 diverse countries. Performing series of logistic regressions the study analyzed the odds of children identified by these measures as disadvantaged presenting lower satisfaction across the three life domains. The findings show that children who live with these extreme disadvantages, especially both, have much lower odds of being satisfied with these life domains, especially in the Self domain. Children who were identified as socially excluded showed lower odds of being satisfied in all three life domains, and in almost all of the countries, compared to those who live under low material resources, pointing to the importance of measuring children's social exclusion in a separate way. The findings are discussed, analyzing cross-national patterns that emerge, and some implications for social policy.

Southwest Airlines Low-Cost Strategy of the United States and the Enlightenment to China

To analyze the strategic of the US-based Southwest Airlines low-cost short-haul routes to application in China. Southwest Airlines strategies include: increasing scale; to extend the aircraft's flight time to short-haul routes based; second-tier major airport operators and reducing staff time off; only the type of aircraft using the unique and only providing basic services; to adhere to the centralized procurement and cost control of the aircraft in terms of transition; simplify processes and low fares. Low-cost airlines of Chinese face some difficulties, for example, the macro-economic environment for the development environment; in the economic environment in the aviation industry challenger - high-speed rail outstanding performance and pilot training; the industry itself features, and so on. In specific applications, the need for a specific treatment is based on low-cost airline in the external environment.

The Cargo Fare Class Mix problem for an intermodal corridor: revenue management in synchromodal container transportation

The intermodal hinterland transportation of maritime containers is under pressure from port authorities and shippers to achieve a more integrated, efficient network operation. Current optimisation methods in literature yield limited results in practice, though, as the transportation product structure limits the flexibility to optimise network logistics. Synchromodality aims to overcome this by a new product structure based on differentiation in price and lead time. Each product is considered as a fare class with a related service level, allowing to target different customer segments and to use revenue management for maximising revenue. However, higher priced fare classes come with tighter planning restrictions and must be carefully balanced with lower priced fare classes to match available capacity and optimise network utilisation. Based on the developments of intermodal networks in North West European, such as the network of European Gateway Services, the Cargo Fare Class Mix problem is proposed. Its purpose is to set limits for each fare class at a tactical level, such that the expected revenue is maximised, considering the available capacity at the operational level. Setting limits at the tactical level is important, as it reflects the necessity of long-term agreements between the transportation provider and its customers. A solution method for an intermodal corridor is proposed, considering a single intermodal connection towards a region with multiple destinations. The main purpose of the article is to show that using a limit on each fare class increases revenue and reliability, thereby outperforming existing fare class mix policies, such as Littlewood.

Exploring the differential impacts of urban transit system on the spatial distribution of local and floating population in Beijing

The floating population has become the main driver of urban population excessive growth in China’s mega cities. Urban transit system (UTS) is a significant factor in population spatial distributions within urban areas, especially rapid and high-capacity transit systems. This paper analyzes the causal effects of the extension of expressways and subways between 2000 and 2010 in the Beijing Metropolitan Area (BMA), focusing on the group differences between the local residents and the floating population. Due to the endogeneity of transportation improvements and population growth, Instrumental Variable (IV) regression model is applied to avoid this problem. The results show the local residents increased in the inner suburbs but decreased in the city center, while the floating population increased in the majority areas. IV regression results show that the extension of urban transit systems had statistically significant impacts on population growth across the BMA. The results also show that the extension of urban subway system had more effects on the floating population than the local residents across the BMA. It is mainly caused by the rather low fare of urban subway system. This implies that the excessive subsidy on urban subway system could result in excessive floating population growth and residential differentiation, even residential segregation. Hence, it is necessary to plan and design reasonable and scientific urban transit systems in order to advance reasonable population size and promote residential integration. Moreover, the regional analysis shows that the effects of urban transportation improvements on the local residents are not statistically significant in the inner suburbs. It implies that urban transportation improvements had limited effects on inducing people to move to suburban areas and controlling center city’s population in Beijing. Therefore, it should be stressed the differentiated effects of urban transportation improvements on population distribution in the process of urban planning and population control.

Airline Performance in China and India: What Drive Airline Efficiency and Pricing

China and India’s air transport sector exhibits substantial differences 30 years after deregulation. The strong presence of private and low-cost carriers and the intense route-level competition are the key drivers for an overall better performance for Indian carriers measured by technical efficiency. The low-cost carrier has the effect of reducing the air fare and promoting the demand in India. However, in China, the entry of a low-cost carrier has not had such effects. We also found that airport concentration in India could lead to cost savings and thus lower air fare, but this did not occur in China.

Plastic and immobile: Unequal intergenerational mobility by genetic sensitivity score within sibling pairs

Contrary to traditional biological arguments, the differential susceptibility model suggests genotype may moderate rather than mediate parent-child economic similarity. Using family fixed effects models of Add Health sibling data, I investigate the relationship between an index of sensitive genotypes and intergenerational mobility. Full, same sex sibling comparisons hold constant parental characteristics and address the non-random distribution of genotype that reduces internal validity in nationally representative samples. Across multiple measures of young adult financial standing, those with more copies of sensitive genotypes achieve lower economic outcomes than their sibling if they are from a low income context but fare better from a high income context. This genetic sensitivity to parental income entails lower intergenerational mobility. Results support the differential susceptibility model and contradict simplistic genetic explanations for intergenerational inequality, suggesting sensitive genotypes are not inherently positive or negative but rather increase dependence on parental income and reduce mobility.

Airline Cooperation and International Travel: Analyses of the Impact of Antitrust Immunity and Joint Ventures on Fares and Traffic

This paper analyzes the impact of varying degrees of airline cooperation on nonstop and connecting international traffic, using a detailed dataset of international travel between the United States and other countries for the years 1998 to 2015. We demonstrate that cooperation by airlines — most notably, the formation of “metal neutral” joint ventures, along with grants of antitrust immunity (ATI) more generally — generates substantial consumer benefits. Specifically, for connecting passengers, we find that ATIs generate fare reductions (relative to interline or simple codeshare itineraries), although these reductions are not significantly larger than those generated by airline alliances without immunity, while JVs lead to substantially larger fare reductions of around eight percent, nearly identical to the reductions associated with “online” travel with a single airline. For nonstop passengers, we find that ATI and JV cooperation between airlines does not, in general, generate higher nonstop fares on “overlap” routes where competing airlines are part of an ATI or JV. Finally, we find that ATIs and JVs are associated with increased segment traffic and net entry on existing and new routes. This expansion of output rounds out our results, demonstrating that, on the whole, ATI grants — particularly when coupled with the formation of JVs — have been strongly pro-competitive, generating lower fares on connecting routes and increased traffic on segments served by multiple alliance partners, with no associated increase in nonstop fares where partner airlines overlap.

Fare System of Urban Public Transportation Services in Davao City, Philippines

A model of modal choice and destination choice was developed to simulate urban travel demand in Davao City, Philippines, and to evaluate fare-setting scenarios relevant to the possible introduction of a new public transportation (PT) system. This nested logit model, combining modal choice and destination choice, was estimated with local person trip survey data collected in 2015 that included data points on 3,531 households, 7,639 individuals, and 15,372 trips. Then, six fare scenarios were developed, incorporating four elements of the fare system, boarding charge, per-kilometer charge, charge distance, and transfer charge, based on the fare system in use in the Philippines. Five evaluation indexes were then applied: average individual benefit, new PT operator’s profit, social surplus, modal share of PT, and regional equity with respect to accessibility. The results demonstrated that ( a) a lower fare increases an individual’s benefit from the trip, ( b) a new PT operator’s profit assumes positive values in a wide range of fare scenarios, ( c) a lower fare improves net social surplus, ( d) a lower fare leads to higher modal share of PT, and ( e) a higher fare tends to compromise the regional equity of accessibility. These results also suggest that from the viewpoint of enhancing social surplus, increasing the boarding charge is a preferable strategy at a higher fare level, whereas the mitigation of the per-kilometer charge is a preferable strategy at a lower fare level.

When Hotelling Meets Vickrey: Service Timing and Spatial Asymmetry in the Airline Industry

This paper analyzes rivalry between transport facilities in a model that includes two sources of horizontal differentiation: geographical space and departure time. We explore how both sources influence facility fees and the price of the service offered by downstream carriers. Travelers’ costs include a fare, a transportation cost to the facility and a schedule delay cost, which captures the monetary cost of departing earlier or later than desired. One carrier operates at each facility and schedules a single departure time. The interactions in the facility-carrier model are represented as a sequential three-stage game in fees, times and fares with simultaneous choices at each stage. We find that duopolistic competition leads to an identical departure time across carriers when their operational cost does not vary with the time of day, but generally leads to distinct service times when this cost is time dependent. When a facility possesses a location advantage, it can set a higher fee and its downstream carrier can charge a higher fare. Departure time differentiation allows the facilities and their carrier to compete along an additional differentiation dimension that can reduce or strengthen the advantage in location. By incorporating the downstream carriers into the analysis, we also find that a higher per passenger commercial revenue at one facility induces a lower fee charged by both facilities to their carrier and a lower fare charged by both carriers at their departure facility, while a lower marginal operational cost for one carrier implies a higher fee at its departure facility, a lower fee at the other facility served by the rival carrier and a lower fare at both facilities.

Bootstrap confidence intervals for effects of electronic peak load pricing on public transport demand

In the public transport system of the city of Münster / Germany electronic ticketing has been introduced. Subsequently flexible electronic fares in public transport have been established in order to conduct peak load pricing. The pricing scheme for the new annual season ticket named FlexAbo consists of a low basic fare per month, an incremental fare per day with trips during the defined peak time limited by a maximum monthly fare. Before launching the FlexAbo a large scale stated choice survey among annual season ticket holders was conducted. They were asked to assume the FlexAbo would replace their tickets. Within the experimental choice context the incremental fare and the maximum fare per month varied according to an orthogonal design. Holders of the seasonal ticket MSAbo and the job ticket were asked whether they would still ride during peak times, delay peak-trips to off-peak times, go by car instead, ride by bicycle or even walk. The shares of shifted peak-trips were forecasted applying a discrete choice model. The results of shifted peak-trips are presented as well as their associated bootstrap confidence intervals. Percentile and bias corrected confidence intervals are compared. Additionally, all results are provided in dependency of different sample sizes. It is shown that even for small shifted shares notable differences between the two techniques for constructing confidence intervals only occur in combination with small sample sizes. Further, the width of the confidence intervals substantially decreases with sample size.

Carpooling Service for Large-Scale Taxicab Networks

Carpooling has long held the promise of reducing gas consumption by decreasing mileage to deliver coriders. Although ad hoc carpools already exist in the real world through private arrangements, little research on the topic has been done. In this article, we present the first systematic work to design, implement, and evaluate a carpool service, called coRide , in a large-scale taxicab network intended to reduce total mileage for less gas consumption. Our coRide system consists of three components, a dispatching cloud server, passenger clients, and an onboard customized device, called TaxiBox . In the coRide design, in response to the delivery requests of passengers, dispatching cloud servers calculate cost-efficient carpool routes for taxicab drivers and thus lower fares for the individual passengers. To improve coRide ’s efficiency in mileage reduction, we formulate an NP-hard route calculation problem under different practical constraints. We then provide (1) an optimal algorithm using Linear Programming, (2) a 2-approximation algorithm with a polynomial complexity, and (3) its corresponding online version with a linear complexity. To encourage coRide ’s adoption, we present a win-win fare model as the incentive mechanism for passengers and drivers to participate. We test the performance of coRide by a comprehensive evaluation with a real-world trial implementation and a data-driven simulation with 14,000 taxi data from the Chinese city Shenzhen. The results show that compared with the ground truth, our service can reduce 33% of total mileage; with our win-win fare model, we can lower passenger fares by 49% and simultaneously increase driver profit by 76%.

Reducing car dependence in the heart of Europe: lessons from Germany, Austria, and Switzerland

ABSTRACTMunich, Berlin, Hamburg, Vienna, and Zurich – the largest cities in Germany, Austria, and Switzerland – have significantly reduced the car share of trips over the past 25 years in spite of high motorisation rates. The key to their success has been a coordinated package of mutually reinforcing transport and land-use policies that have made car use slower, less convenient, and more costly, while increasing the safety, convenience, and feasibility of walking, cycling, and public transport. The mix of policies implemented in each city has been somewhat different. The German cities have done far more to promote cycling, while Zurich and Vienna offer more public transport service per capita at lower fares. All five of the cities have implemented roughly the same policies to promote walking, foster compact mixed-use development, and discourage car use. Of the car-restrictive policies, parking management has been by far the most important. The five case study cities demonstrate that it is possible to reduce car dependence even in affluent societies with high levels of car ownership and high expectations for quality of travel.

Did Cheaper Flights Change the Direction of Science?

We test how a reduction in travel cost affects the rate and direction of scientific research. Using a fine-grained, scientist-level dataset within chemistry (1991-2012), we find that after Southwest Airlines enters a new route, scientific collaboration increases by 50%, an effect that is magnified when weighting output by quality. The benefits from the lower fares, however, are not uniform across scientist types: younger scientists and scientists that are more productive than their local peers respond the most. Thus, cheaper flights, by reducing frictions otherwise induced by geography and allowing for additional face-to-face interactions, seem to enable better matches over distance.

Did Cheaper Flights Change the Direction of Science?

We test how a reduction in travel cost affects the rate and direction of scientific research. Using a fine-grained, scientist-level dataset within chemistry (1991-2012), we find that after Southwest Airlines enters a new route, scientific collaboration increases by 50%, an effect that is magnified when weighting output by quality. The benefits from the lower fares, however, are not uniform across scientist types: younger scientists and scientists that are more productive than their local peers respond the most. Thus, cheaper flights, by reducing frictions otherwise induced by geography and allowing for additional face-to-face interactions, seem to enable better matches over distance.

Exploring the Sustainability Challenges of Long-distance Passenger Trends in Europe

This paper reviews current drivers of long-distance passenger transport demand in Europe, and elaborates about their environmental impacts and the suitability of current EU policies to address them. The paper focuses on car and air travel, as they concentrate the bulk of environmental impacts, at least in terms of GHG emissions. Furthermore, car travel keeps the highest share of total travel, and air travel is the fastest growing mode in Europe, justifying a closer look to both modes. The prospects of a peaking or “plateau” value for long-distance car travel are discussed, concluding that there is robust evidence of peaking in many European countries, although at unacceptable high levels from a sustainability perspective. In the case of air travel, the main sustainability challenge is the sustained growth in demand, spurred by the strategy of many airports and airlines to induce further demand with low fares. Both trends would need action from governments. The need for action is further justified by two socioeconomic trends: population, with growth concentrated precisely in those countries with higher long-distance mobility patterns, and disposable income, with median values stagnated for many years. The former would suggest a need for demand management action focusing on those countries with higher demand; the latter would challenge the traditional understanding, which associates long-distance transport demand to increasing income and to economic prosperity.

Shifting from Metro to Sustainable Surface Modes for Short-Distance Travel

Many cities with metro systems are experiencing overcapacity problems on some or many lines. Beijing is one such city whose metro also services a high proportion of short-distance trips. The proportion of short-distance travel—less than 5 km (3.1 mi)—carried out on foot or on bicycle varies greatly across cities, depending on alternative travel modes and local environmental conditions. In this study, users of a multimodal transportation corridor that included metro ( n = 400) were interviewed about their travel mode preferences depending on distance within the short-distance travel category. Users were also asked to state their preferences for mode, depending on distance and a progressive rise in metro ticket fare. Finally, users were asked to state their mode preferences for trips that extended to five metro stations if a public bicycle system with a separate lane were made available. Modal choice was highly sensitive to variable short-distance trips. A progressive shift to bus use occurred as the metro fare price increased, with little change in the walking rate or in the use of motorized modes. When the original low metro fare price was maintained, the availability of a public bicycle system led to a sevenfold increase in bicycle use, with significant drops in bus share, and to a lesser extent, metro share. Responses to the stated preference survey indicated that fares and a public bicycle program might be effective to manage the use of metro for short-distance trips.

Editor's Introduction: The Politics of Urban Reform in the Gilded Age and Progressive Era, 1870–1920

Editor's Introduction: The Politics of Urban Reform in the Gilded Age and Progressive Era, 1870–1920

The effects of low cost carrier entry in the Turkish Airline industry

The paper examines the impact of low-cost carrier Pegasus Airlines’ entry on Turkish Airlines’ yields in domestic and international routes. We find that Turkish Airlines’ yields are lower in both types of routes in response to entry. Moreover, the LCC entry affects domestic routes substantially more than international routes. Due to lower fares and heightened competition, the number of passengers has more than quadrupled in the last decade. Hence, we argue that Pegasus entry has been instrumental in transforming the Turkish Airline industry, which has become more dynamically competitive recently.

The impact of low-cost carriers on airport choice in the US: A case study of the Washington–Baltimore region

Abstract Previous research has shown that low-cost carriers (LCCs) may stimulate traffic at an airport by offering low fares. Using passenger survey data from the Washington–Baltimore region’s three airports, we find that the benefits of LCCs to airports extend beyond the traffic generated directly by the LCCs through their low fares. In addition, we find that the mere presence of an LCC at an airport can attract passengers, even to competing carriers. These “halo effects” from LCC presence increase the significance to airport managers of attracting LCCs in order to generate passenger demand.

Strategic principles at Southwest Airlines

Purpose – Southwest is the world’s fourth largest airline and has consistently been one of the most admired organisations in the USA. Its founder and Chairman Emeritus, Herb Kelleher, attributes much of this success to the use of strategic principles. This gives a guiding framework for employees within the company but allows them leeway to make their own decisions. The result is greater employee engagement, a more efficient organisation that is adapting to the needs of its major stakeholders and greater customer satisfaction. Design/methodology/approach – The article analysis of the use of the strategic principle methodology at Southwest Airlines. It focuses on the position of Southwest as “THE low fare” airline and the use of humour and different working practices within the airline. Findings – The article shows that If this can be done in an industry as heavily regulated as aviation, it can be applied with the same success to many other business sectors and organisations.