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Quantifying Delay Externalities in Airline Networks

Author

Listed:
  • Liyu Dou

    (The Chinese University of Hong Kong)

  • Jakub Kastl

    (Princeton University)

  • John Lazarev

    (University of Pennsylvania)

Abstract
We develop a framework for quantifying delay propagation in airline networks. Using a large comprehensive data set on actual delays and a model-selection algorithm (elastic net) we estimate a weighted directed graph of delay propagation for each major airline in the US. We use these estimates to decompose the airline performance into "luck" and "ability." We find that luck may explain about 38% of the performance difference between Delta and American in our data. We further use these estimates to describe how network topology and other airline network characteristics (such as aircraft fleet heterogeneity) affect the expected delays. Finally, we propose a model of aircraft scheduler who decides which flights to delay and by how much. We then use the estimated model to evaluate counterfactual scenarios of investments in airport infrastructure in terms of their impact on delays.

Suggested Citation

  • Liyu Dou & Jakub Kastl & John Lazarev, 2020. "Quantifying Delay Externalities in Airline Networks," Working Papers 2020-65, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2020-65
    as

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    File URL: http://www.princeton.edu/~jkastl/delays_v14.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Airline Networks; Shock Propagation; Elastic Net;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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