According to our text (Perrine's Literature: Structure, Sound and Sense. Seventh Edition, 1997,) the characteristics of a tragic hero are that he is usually a man of a respected position; he is responsible for his own downfall (tragic flaw), he believes his downfall will serve a greater good, and that the viewers feel pity and sympathy for him after his death. Willy Loman is a tragic hero because he falls from a height of respect due to his own flaws.
Yes, Willy has a height of respect from which he falls. Willy falls from his height of respect as both a businessman and a father throughout his life. When Willy was younger and Biff and Happy were still kids Willy was given the utmost respect from them then as they begin to get older they continually lose a little respect for him each day. This is true for him as a businessman as well. He was once respected in his line of work then he eventually became the joke of his business. In flashbacks from the past it is obvious to the viewers that Biff has a great deal of respect for Willy because of his reputation as a salesman and therefore makes him his role model. This is very important to Willy because he thinks of himself as both a great salesman and father who is at the top of his game in both aspects. Another reason that it is so important to him that Biff respect him is because Willy sees a lot of himself, as he wanted to be in Biff. He wants Biff to be great at everything that he wasn't as a kid such as a star athlete, popular and a leader. Due to this Willy makes up excuses for everything that Biff does wrong such as stealing the football or the materials from the construction site next door to their house. He blows them off as Biff taking initiative or that he is just being a kid. Willy wants Biff to great and to make sure that he does succeed in life Willy begins to tell him how great he is, that he is his own man, not to take orders from anyone and most importantly to be his own boss and not to sell himself short.