Inter-Island modal competition: the case of Gran Canaria-Tenerife

Abstract

In this paper, we use discrete choice modelling to analyse inter-modal competition in the most important route within The Canary Islands (Spain). We estimate different Nested Logit (NL) models that allow us to know the main factors that determine modal choice among a set of three existing alternatives: plane and two fast ferries. We obtained passengers’ Willingness To Pay (WTP) for improvements in the main level-of-service attributes. Direct demand elasticities for the different competing modes are also derived. The results of our analysis can be used as an interesting policy instrument for operators’ managers and policy makers.