We estimate the switching costs created by tier levels, one of the main components of airline frequent flier programs, by exploiting discrete tier thresholds. We first demonstrate that travellers increase their demand to reach a higher tier level just before the end of the calendar year when tier levels are determined, but do not manipulate demand in earlier months. This allows for a novel fuzzy discontinuity approach to identify causal demand effects of higher tier levels, from which we derive the airline switching costs. While the lowest level creates only negligible switching costs, the switching costs associated with the highest tier level are in the range of 30%–41% of the price of a ticket, representing an important determinant of travel behaviour in airline markets. These results especially provide evidence of the use of tier levels to induce loyalty from high-frequency travellers for whom free flight awards alone would not create substantial switching costs.

中文翻译：

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从白银到白金：常旅客等级对航空旅客行为的影响


我们通过利用离散的等级阈值来估计等级（航空公司常旅客计划的主要组成部分之一）产生的转换成本。我们首先证明，在确定等级级别的日历年年底之前，旅行者会增加需求以达到更高的等级级别，但不会在前几个月操纵需求。这允许采用一种新颖的模糊不连续性方法来识别更高级别的因果需求影响，从中我们可以得出航空公司转换成本。虽然最低级别仅产生可以忽略不计的转换成本，但与最高级别相关的转换成本在机票价格的 30% 至 41% 范围内，是航空市场旅行行为的重要决定因素。这些结果特别提供了使用等级来提高高频旅客忠诚度的证据，对于这些高频旅客来说，仅免费飞行奖励不会产生大量的转换成本。