Estimation of National Air Passenger Demand in the Absence of the Price Variable: Chile Case

Abstract

This research estimates the demand for domestic passengers at airports without using the air tickets price variable, through an econometric model based on a observable socioeconomic variable such as GDP, using data (2000-2024) from Chile´s main airport.

The central purpose of this research is to contribute to the existing body of knowledge on air transport demand modeling in contexts where the price variable is unavailable, unreliable, or its inclusion generates distortion. This purpose is supported by the growing need for analytical tools that aid airport planning, social evaluation of investment, and the formulation of territorial connectivity policies.

The general objective is to develop econometric model that allows the estimation of national air passenger demand without considering the price variable, by using observable and reliable socioeconomic variable that act as indirect determinants of air traffic.

In many airports, especially in developing countries such as Chile, precise, complete, or disaggregated information on airfares is not available. This absence prevents the use of the price variable in classical models for estimating air transport demand, which typically considers price a fundamental determinant of consumer behavior. The lack of this variable creates a methodological gap that limits airport planning, demand forecasting, and the economic evaluation of air infrastructure projects.

To achieve the objectives, a parsimonious, interpretable, and robust model is proposed for domestic passengers, comparing level and logarithmic specifications while explicitly controlling for the 2020-2021 shock associated with the COVID-19 pandemic.

The results demonstrate that it is possible to estimate national passengers demand even in the absence of the price variables, by using an alternative macroeconomic model supported by socioeconomic and structural variables.