Access

You are not currently logged in.

Access JSTOR through your library or other institution:

login

Log in through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

Does Competition Reduce Price Dispersion? New Evidence from the Airline Industry

Kristopher S. Gerardi and Adam Hale Shapiro
Journal of Political Economy
Vol. 117, No. 1 (February 2009), pp. 1-37
DOI: 10.1086/597328
Stable URL: http://www.jstor.org/stable/10.1086/597328
Page Count: 37
  • Read Online (Free)
  • Download ($14.00)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Does Competition Reduce Price Dispersion? New Evidence from the Airline Industry
Preview not available

Abstract

We analyze the effects of competition on price dispersion in the airline industry, using panel data from 1993:Q1 through 2006:Q3. Competition has a negative effect on price dispersion, in line with the textbook treatment of price discrimination. This effect is pronounced for routes with consumers characterized by relatively heterogeneous elasticities of demand. On routes with a homogeneous customer base, the effects of competition on price dispersion are smaller. Our results contrast with those of Borenstein and Rose, who found that price dispersion increases with competition. We reconcile the different results by showing that the cross‐sectional estimator suffers from omitted‐variable bias.

Page Thumbnails

  • Thumbnail: Page 
1
    1
  • Thumbnail: Page 
2
    2
  • Thumbnail: Page 
3
    3
  • Thumbnail: Page 
4
    4
  • Thumbnail: Page 
5
    5
  • Thumbnail: Page 
6
    6
  • Thumbnail: Page 
7
    7
  • Thumbnail: Page 
8
    8
  • Thumbnail: Page 
9
    9
  • Thumbnail: Page 
10
    10
  • Thumbnail: Page 
11
    11
  • Thumbnail: Page 
12
    12
  • Thumbnail: Page 
13
    13
  • Thumbnail: Page 
14
    14
  • Thumbnail: Page 
15
    15
  • Thumbnail: Page 
16
    16
  • Thumbnail: Page 
17
    17
  • Thumbnail: Page 
18
    18
  • Thumbnail: Page 
19
    19
  • Thumbnail: Page 
20
    20
  • Thumbnail: Page 
21
    21
  • Thumbnail: Page 
22
    22
  • Thumbnail: Page 
23
    23
  • Thumbnail: Page 
24
    24
  • Thumbnail: Page 
25
    25
  • Thumbnail: Page 
26
    26
  • Thumbnail: Page 
27
    27
  • Thumbnail: Page 
28
    28
  • Thumbnail: Page 
29
    29
  • Thumbnail: Page 
30
    30
  • Thumbnail: Page 
31
    31
  • Thumbnail: Page 
32
    32
  • Thumbnail: Page 
33
    33
  • Thumbnail: Page 
34
    34
  • Thumbnail: Page 
35
    35
  • Thumbnail: Page 
36
    36
  • Thumbnail: Page 
37
    37