Economics Research Seminar
Separating Price Discrimination from Price Dispersion: Evidence from International Airline Markets
Sponsored by: Economics Department
Speaker(s): Federico Ciliberto, Ph.D., University of Virginia
Date & Time: Monday, Sep. 21, 2015 from 2 p.m. to 3:30 p.m.
We develop a practical methodology to separate price discrimination from other
sources of price dispersion, and apply it to international airline markets using novel
data from the Department of Commerce’s Survey of International Air Travelers (SIAT). The methodology relies on a Wertz-Gini decomposition of a Gini coefficient measuring overall price dispersion, and results in an index measuring the fraction of price dispersion attributable to price discrimination based on both ticket and passenger characteristics. We find these characteristics explain up to 82.3 percent of price dispersion, demonstrating that much of the observed dispersion is discriminatory. Additionally, we show that a larger value of the index is associated with fewer passengers flying in a market, suggesting price discrimination is unlikely to enhance welfare in international airline markets.
Please join the Economics Department for a research seminar. This event is open to all Case Western Reserve University faculty, Ph.D. students, economic majors and minors, and those interested in economics research.
Peter B. Lewis Building
11119 Bellflower Road, Room 220
Cleveland, OH 44106-7235