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Third-degree price discrimination in a short-stay accommodation industry
journal contribution
posted on 2023-05-19, 03:27 authored by Marsden, A, Sibly, HThis article analyses the pricing in the short-stay accommodation industry in Tasmania. It utilizes a novel 2008 survey of Tasmanian short-stay accommodation firms in which business managers were asked about their perception of the elasticity of their firm’s demand in each of the market segments that their firm supplied. This direct observation of elasticity allows us to demonstrate that firms’ price across market segments act in a manner consistent with the Lerner index and the theory of third-degree price discrimination. Further we show, in line with expectations based on the literature, that increased quality of the accommodation lowers the elasticity of demand, while the elasticity of demand is higher in winter. Surprisingly, Internet sales channels do not exhibit a different elasticity of demand to other sales channels.
History
Publication title
Applied EconomicsVolume
49Issue
51Pagination
5166-5182ISSN
0003-6846Department/School
TSBEPublisher
Routledge Taylor & Francis LtdPlace of publication
4 Park Square, Milton Park, Abingdon, England, Oxfordshire, Ox14 4RnRights statement
Copyright 2017 Informa UK Limited, trading as Taylor & Francis GroupRepository Status
- Restricted