44th Congress of the European Regional Science Association: "Regions and Fiscal Federalism", 25th - 29th August 2004, Porto, Portugal
In this paper, we describe part of an ongoing study of airport choice for passengers departing from the San Francisco Bay area. The aim of the present paper is to test for the prevalence of taste heterogeneity across travellers, using the Mixed Multinomial Logit (MMNL) model. Our results indicate the presence of significant levels of heterogeneity in tastes, especially with respect to the sensitivity to access time, characterised by significant (deterministic) variation between groups of travellers (business/leisure, residents/visitors) as well as random variation within groups of travellers. Our analysis reinforces earlier findings showing that business travellers are far less sensitive to fare increases than leisure travellers, and are willing to pay a higher price for decreases in access time (and generally also increases in frequency) than is the case for leisure travellers. Finally, the results show that the random variation between business travellers in terms of sensitivity to access time is more pronounced than that between leisure travellers, as is the case for visitors when compared to residents.