Do Prices Grow More in Euroland? Evidence from the Airline Industry

Enrico Bachis, Claudio A. A. Piga
2006 Social Science Research Network  
Using more than 10 million on-line fares, we study the determinants of yearly fares' changes in June 2002-June 2005. We verify whether airlines took advantage, after the Euro introduction, of potential in ‡ationary pressures by increasing their fares more in routes to Eurozone nations. All else equal, fares in such routes declined, although their reduction was smaller than in the case of routes outside the Euro area. The evidence also points at the possibility that the changeover may have
more » ... over may have enhanced the airlines' ability to engage in inter-temporal price discrimination. various seminars. The authors are grateful for the comments received. Thanks to Theo Panagiotidis for his feedback. The usual disclaimer applies. 2 2.5 3 3.5 J a n -9 6 J u n -9 6 J a n -9 7 J u n -9 7 J a n -9 8 J u n -9 8 J a n -9 9 J u n -9 9 J a n -0 0 J u n -0 0 J a n -0 1 J u n -0 1 J a n -0 2 J u n -0 2 J a n -0 3 J u n -0 3 J a n -0 4 J u n -0 4 J a n -0 5 J u n -0 5
doi:10.2139/ssrn.905534 fatcat:kjmro2qcrjakxa3d3abigfrziq