Applied Economics Letters
price dispersion, political polarization, COVID-19, airline
This paper analyzes the relationship between price dispersion and political polarization of the endpoint states on a given route during the COVID-19 pandemic. The sample includes ticket information from the DB1B database between 2020:Q1 and 2021:Q4. The fixed-effect panel instrument variable (IV) estimation finds evidence of increased price dispersion on routes connecting states led by a Republican governor than those linking Democrat-led states. My analysis adds to the literature by exploiting the impact of political factors (i.e. demand shocks triggered by the COVID-19 policy interventions) on price dispersion using the latest data.
This article was published Open Access thanks to a transformative agreement between Milner Library and Taylor & Francis.
Chen, Jihui, "Political Polarization and Price Dispersion: Recent Evidence from the Airline Industry During COVID-19" (2023). Faculty Publications – Economics. 15.