How does COVID-19 affect intertemporal price dispersion? Evidence from the airline industry

Alexander Luttmann and Alberto Gaggero

MPRA Paper from University Library of Munich, Germany

Abstract: This study provides empirical evidence documenting how COVID-19 affects intertemporal price dispersion in the airline industry. Exploiting a unique panel of 43 million fares collected before and during the pandemic, we find that airlines discounted fares by an average of 57%. The rate of intertemporal price increases also declined, particularly in the last week to departure. We also find that flight-level price dispersion increased during the pandemic. Fare decreases (and the associated increase in price dispersion) are found to be driven primarily by the diffusion of COVID-19 at the destination as opposed to the origin market.

Keywords: airlines; COVID-19; intertemporal pricing; price dispersion (search for similar items in EconPapers)
JEL-codes: D40 I19 L11 L93 (search for similar items in EconPapers)
Date: 2022-02-02
New Economics Papers: this item is included in nep-ind, nep-reg and nep-tre
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Citations: View citations in EconPapers (2)

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https://mpra.ub.uni-muenchen.de/111797/1/MPRA_paper_111797.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/112683/10/MPRA_paper_112683.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/117535/18/Airline_COVID_v27.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/119763/26/MPRA_paper_119763.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:111797

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