Title

Accidents, Airline safety perceptions and consumer demand

Source of Publication

Journal of Economics and Finance

Abstract

This paper assesses the impact of perceptions about the safety level of airlines on enplanement. Consumer perceptions are specified with a Poisson distribution that updates over time. Using two different empirical specifications via a pooled generalized least squares procedure with fixed effects; we find no statistical evidence of a correlation between the perceived level of safety and enplanement. However, under an alternative specification in which the severity levels of accidents are ranked, we find that safety perceptions about accidents with minor injuries have no statistically significant impact on enplanement, while perceptions about accidents with serious injuries and fatalities lead to cumulative decreases in enplanement.

Document Type

Article

First Page

297

Last Page

305

Publication Date

1-1-2006

DOI

10.1007/BF02752736

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