Hidden Baggage: Behavioral Responses to Changes in Airline Ticket Tax Disclosure

Sebastien Bradley, Naomi E. Feldman

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

We examine the impact of a January 2012 enforcement action by the US Department of Transportation that required US air carriers and online travel agents to modify their web interfaces to incorporate all ticket taxes in up-front, advertised fares. We show that the more prominent display of tax-inclusive prices is associated with significant reductions in consumer tax incidence, demand, and ticket revenues along more heavily taxed itineraries. In particular, the fraction of unit taxes that airlines passed onto consumers fell by roughly 75 cents for every dollar of tax.

Original languageEnglish
Pages (from-to)58-87
Number of pages30
JournalAmerican Economic Journal: Economic Policy
Volume12
Issue number4
DOIs
StatePublished - 1 Nov 2020
Externally publishedYes

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (all)

Fingerprint

Dive into the research topics of 'Hidden Baggage: Behavioral Responses to Changes in Airline Ticket Tax Disclosure'. Together they form a unique fingerprint.

Cite this