Habit Persistence in Air Passenger Traffic Destined for Florida

Abstract

At the core of travel demand theory is separating short- and long-term responses to events and determining how quickly potential travelers respond, if at all, to current events. Using habit persistence models applied to air travel to Florida, air travel demand models are estimated that measure habit persistence while accounting for economic and noneconomic travel demand variables. Along with the traditional economic demand drivers, the models account for weather, wildfires, and adjustments to post-9/11. Elasticities are shown and then simulations are used to fully illustrate the impacts of changing ticket prices, incomes, seasonality, Florida storms, and the recovery from 9/11. The degree of habit persistence is measured and then the short- and long-run adjustments in air traffic destined for Florida are shown.