Booking in the Rain: Testing the impact of public information on prices
Paolo Figini (),
Simona Cicognani and
Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna
The key role played by public information in market economies is paramount. Yet, investigation on how prices are affected is hindered by intricate endogeneity and parametrization issues. This paper contributes to the literature by identifying and studying a case where public information is related to weather forecasts, in a sector (tourism) where meteorological conditions exogenously impact on both suppliers’ and consumers’ decisions, especially in leisure destinations. We first develop a theoretical model where forecasts affect demand and hence equilibrium prices in accommodation: an improvement in the weather forecast has a positive impact on the price, the effect being stronger the higher the level of accuracy of the forecast and the level of ex ante uncertainty in weather conditions. We then estimate an augmented hedonic price model where dynamic characteristics (typical of advanced booking strategies) are included together with information about weather forecasts. Consistent with the theory, we find that, ceteris paribus, good weather forecasts are associated to higher prices, the impact being larger the higher their level of accuracy and the higher the ex ante level of uncertainty in weather conditions.
JEL-codes: D80 D22 L83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-tur
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp1137
Access Statistics for this paper
More papers in Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna Contact information at EDIRC.
Bibliographic data for series maintained by Dipartimento Scienze Economiche, Universita' di Bologna ().