EconPapers    
Economics at your fingertips  
 

Hidden Baggage: Behavioral Responses to Changes in Airline Ticket Tax Disclosure

Sebastien Bradley and Naomi Feldman ()

American Economic Journal: Economic Policy, 2020, vol. 12, issue 4, 58-87

Abstract: We examine the impact of a January 2012 enforcement action by the US Department of Transportation that required US air carriers and online travel agents to modify their web interfaces to incorporate all ticket taxes in up-front, advertised fares. We show that the more prominent display of tax-inclusive prices is associated with significant reductions in consumer tax incidence, demand, and ticket revenues along more heavily taxed itineraries. In particular, the fraction of unit taxes that airlines passed onto consumers fell by roughly 75 cents for every dollar of tax. These results present evidence of consumer inattention in a novel institutional setting featuring quasi-experimental variation in tax salience, economically significant tax amounts, and endogenous price responses.

JEL-codes: D91 H22 H25 H31 L84 L93 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/pol.20190200 (application/pdf)
https://doi.org/10.3886/E112181V1 (text/html)
https://www.aeaweb.org/doi/10.1257/pol.20190200.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/pol.20190200.ds (application/zip)

Related works:
Working Paper: Hidden Baggage: Behavioral Responses to Changes in Airline Ticket Tax Disclosure (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejpol:v:12:y:2020:i:4:p:58-87

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/pol.20190200

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2021-08-26
Handle: RePEc:aea:aejpol:v:12:y:2020:i:4:p:58-87