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Third-degree price discrimination in a short-stay accommodation industry

Citation

Marsden, A and Sibly, H, Third-degree price discrimination in a short-stay accommodation industry, Applied Economics, 49, (51) pp. 5166-5182. ISSN 0003-6846 (2017) [Refereed Article]

Copyright Statement

Copyright 2017 Informa UK Limited, trading as Taylor & Francis Group

DOI: doi:10.1080/00036846.2017.1302063

Abstract

This 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 firmís demand in each of the market segments that their firm supplied. This direct observation of elasticity allows us to demonstrate that firmsí 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.

Item Details

Item Type:Refereed Article
Keywords:pricing, discrimination, elasticity, tourism
Research Division:Economics
Research Group:Applied Economics
Research Field:Industry Economics and Industrial Organisation
Objective Division:Economic Framework
Objective Group:Microeconomics
Objective Field:Industrial Organisations
Author:Sibly, H (Dr Hugh Sibly)
ID Code:115529
Year Published:2017
Deposited By:Tasmanian School of Business and Economics
Deposited On:2017-03-29
Last Modified:2017-11-13
Downloads:0

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