Modeling passenger choice faced by carriers in transportation markets

Natália Santos FERREIRA[1]

Alessandro Vinícius Marques de OLIVEIRA[2]

§    ABSTRACT: Studies on demand for transportation services possess unquestionable relevance given the necessity of knowing the consumer behavior before the alternative services supplied in the market, and from the authorities to planning the investment flows on the related infrastructures. This paper aims at proposing the nested logit formulation for modeling the choice process of a passenger faced to a variety of transportation provider firms available at the transportation modal he selected for traveling, to the distinct products origin-and-destiny available, or same for the choice between alternative modals, as in the situation of inter-modal competition. From the proposed model own and cross-price elasticities of demand can be easily obtained and then, costumers’ sensibility in what regards charged prices, as well as their substitution patterns for alternative transportation providers, can be directly assessed. And the principal advantage of nested logit above tradicional logit is that the former gives an elasticities’ matrix that reflect the demand substitution patterns in a more accurate fashion.

§    KEYWORDS: Discrete-choice models; transportation; logistic.


[1] Agência Nacional de Aviação Civil (ANAC), CEP: 20030-040, Rio de Janeiro, RJ, Brasil. E‑mail:

[2] Núcleo de Estudos em Competição e Regulação do Transporte Aéreo (NECTAR), Instituto Tecnológico de Aeronáutica, CEP 12.228-900, São José dos Campos, SP, Brasil. E‑mail: