Bilotkach, Volodymyr, Gorodnichenko, Yuriy and Talavera, Oleksandr (2012) Sensitivity of prices to demand shocks: a natural experiment in the San Francisco Bay area. Transportation Research Part A: Policy and Practice, 46 (7). pp. 1137-1151. ISSN 0965-8564
Full text not available from this repository. (Request a copy)Abstract
We analyze the impact of a freeway interchange collapse in the San Francisco Bay Area on the difference in airfare quotes for travel into the area’s main airports. The incident temporarily made Oakland airport a less attractive choice for traveling to San Francisco, so we hypothesize that fares for travel into Oakland will be relatively lower while the freeway interchange was out of service. We test our contention using a sample of fare quotes collected on-line, and find the expected effect of a magnitude of 6–7%. Our results imply the following important conclusions. First, the demand-side shock was well absorbed by the supply side. Second, adjustment of prices and return to the status quo once the shock vanished was swift.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Natural experiment, demand shocks, congestion, price stability |
| Subjects: | L100 Economics N300 Finance N900 Others in Business and Administrative studies |
| Department: | Faculties > Business and Law > Newcastle Business School |
| Depositing User: | Helen Pattison |
| Date Deposited: | 23 May 2012 14:36 |
| Last Modified: | 19 Nov 2019 09:52 |
| URI: | http://nrl.northumbria.ac.uk/id/eprint/7361 |
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