A factor-analytic generalized nested logit model for determining market position of airlines

Chieh Hua Wen, Tan Ni Chen, Chiang Fu

Research output: Contribution to journalArticlepeer-review

20 Citations (Scopus)


This study presents a factor-analytic specification incorporated into the generalized nested logit model to gain insights into passenger service perceptions through positioning analysis of closely competing airlines. The model can illustrate market positions of competing airlines, while simultaneously capturing substitution patterns among airlines. The data used comes from a stated preference survey containing travelers' airline preferences for international trips from Taiwan to Japan. Two latent dimensions comprised of service attributes that were not considered in the stated choice design are identified, namely "amenities and ground service" and "reputation and credibility." The choice map identifies two highly competing groups based on similarities on latent attributes and shared error components. The factor-analytic generalized logit model statistically outperforms the factor-analytic multinomial logit and offers important behavioral and managerial suggestions for airlines and policy-makers.

Original languageEnglish
Pages (from-to)71-80
Number of pages10
JournalTransportation Research Part A: Policy and Practice
Publication statusPublished - 2014 Apr

All Science Journal Classification (ASJC) codes

  • Civil and Structural Engineering
  • Transportation
  • Management Science and Operations Research


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