Is the price elasticity of demand asymmetric? Evidence from public transport demand

نویسندگان

چکیده

Demand is frequently found to react differently price increases than decreases. This finding usually attributed psychological phenomena such as loss aversion or the different pace with which changes become known potential buyers leading a kinked demand curve. kink often invoked in explaining why prices are sticky, especially downward direction. We analyse presence of and causes for asymmetric elasticities London Underground. Studying public transport offers unique advantages: service cannot be stored must consumed at point purchase, consumption preponed postponed. During period that we study some nominal fares on network have increased while others decreased, offering opportunity observe both cases. Comparing after decrease increase, find more sensitive decreases (by 0.5 1.0 percentage points). also contributes this asymmetry least intensive margin demand.

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ژورنال

عنوان ژورنال: Journal of Economic Behavior and Organization

سال: 2022

ISSN: ['0167-2681', '1879-1751']

DOI: https://doi.org/10.1016/j.jebo.2022.09.005