Economic Analysis of Flight Delay

Our project began as an investigation into the phenomenon of flight delay. We approached this problem with two goals in mind. First, we used mathematical statistics and econometric methods to develop a predictive model of flight delay. An improved forecasting process has obvious benefits for customers, and would additionally shed light on the factors which airports and airlines should seek to change in order to reduce flight delay. Our secondary goal was to complement this predictive research with a theoretical analysis of the incentive structure that consumers and producers face. We limited the scope of this model to delayed flights that resulted as a direct consequence of a consumer or producer’s action. Choosing to focus on the cost of wasted time, we developed an economic model of how airlines and customers interact under the imposition of flight delay. We then re-visited the data and used our model to inform and refine our econometric methods