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The value of space during a pandemic

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  • Hyman, Max J.
  • Savage, Ian

Abstract

To encourage social distancing during the COVID-19 pandemic, Delta Air Lines did not sell the middle seat on its flights that had them. In the second half of 2020 its principal rivals, American Airlines and United Airlines, continued to sell the middle seat. Analysis of U.S. Department of Transportation airline ticket data on 1358 domestic routes finds that Delta raised its fares by 15%. Therefore, passengers paid $23 to prevent a stranger from sitting next to them.

Suggested Citation

  • Hyman, Max J. & Savage, Ian, 2021. "The value of space during a pandemic," Economics Letters, Elsevier, vol. 207(C).
    • Handle: RePEc:eee:ecolet:v:207:y:2021:i:c:s0165176521003165
    DOI: 10.1016/j.econlet.2021.110039
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    References listed on IDEAS

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    1. Stole, Lars A., 2007. "Price Discrimination and Competition," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 34, pages 2221-2299, Elsevier.
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    Cited by:

    1. Hyman, Max J. & Savage, Ian, 2022. "The effect of vertical product differentiation on fare and market share: Evidence from Delta Air Lines’ middle seat policy," Economics of Transportation, Elsevier, vol. 31(C).
    2. Gualini, Andrea & Zou, Li & Dresner, Martin, 2023. "Airline strategies during the pandemic: What worked?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).

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    More about this item

    Keywords

    Aviation; Pandemic; Price discrimination;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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