The Effect of Air Traffic Delays on Airline Prices
نویسنده
چکیده
A legislative change in takeoff and landing restrictions at LaGuardia Airport provides an opportunity to study the effect of an exogenous shock to product quality on prices in the airline industry. I test how the price response varies with the degree of competition in the market. I find that prices fall by $1.42 on average for each additional minute of flight delay, and that the price response is substantially larger in more competitive markets. JEL Codes: L11, L15, L93 1 Department of Economics, University of California at San Diego, 9500 Gilman Drive #0508, La Jolla, CA 920930508, email: [email protected]
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