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

Sebastien Bradley · Naomi E. Feldman

37 citations0/0 files storedAmerican Economic Journal Economic Policy

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Consumer Market Behavior and Pricing Economic and Fiscal Studies Energy, Environment, and Transportation Policies

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. These results present evidence of consumer inattention in a novel institutional setting featuring quasi-experimental variation in tax salience, economically significant tax amounts, and endogenous price responses. (JEL D91, H22, H25, H31, L84, L93)

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 37 citations exist upstream.

References

2009Salience and Taxation: Theory and Evidence 2009Psychology and Economics: Evidence from the Field 2006Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets 2013Pass-Through as an Economic Tool: Principles of Incidence under Imperfect Competition 1994Competition and Price Dispersion in the U.S. Airline Industry 2009E-ZTAX : Tax Salience and Tax Rates *2008How do Incumbents Respond to the Threat of Entry? Evidence from the Major Airlines *2014Regulating Consumer Financial Products: Evidence from Credit Cards *

Cited by

2022Developing business process agility: Evidence from inter-organizational information systems of airlines and travel agencies 2023Price Transparency, Media, and Informative Advertising 2023Conspiracy Theory: On Certain Misconceptions About the Uses of Behavioral Science in Government

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.