Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/84142
Authors: 
Brueckner, Jan K.
Lee, Darin N.
Picard, Pierre M.
Singer, Ethan
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4397
Abstract: 
This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline's fares should fall when it introduces a bag fee, but that the full trip price (the bag fee plus the new fare) could either rise or fall. The empirical evidence presented in the paper provides strong confirmation of this prediction. The data also suggest that the average fare falls by less than the bag fee itself, so that the full price of a trip rises for passengers who choose to check bags.
Subjects: 
unbundling
airlines
bag fees
JEL: 
L90
Document Type: 
Working Paper

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