TY - JOUR
T1 - Hidden Baggage
T2 - Behavioral Responses to Changes in Airline Ticket Tax Disclosure
AU - Bradley, Sebastien
AU - Feldman, Naomi E.
N1 - Publisher Copyright:
© 2020, American Economic Journal: Economic Policy.All Rights Reserved.
PY - 2020/11
Y1 - 2020/11
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=85125093127&partnerID=8YFLogxK
U2 - 10.1257/pol.20190200
DO - 10.1257/pol.20190200
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AN - SCOPUS:85125093127
SN - 1945-7731
VL - 12
SP - 58
EP - 87
JO - American Economic Journal: Economic Policy
JF - American Economic Journal: Economic Policy
IS - 4
ER -