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Political polarization and price dispersion: recent evidence from the airline industry during COVID-19

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  • Jihui Chen

Abstract

This paper analyzes the relationship between price dispersion and political polarization of the endpoint states on a given route during the COVID-19 pandemic. The sample includes ticket information from the DB1B database between 2020:Q1 and 2021:Q4. The fixed-effect panel instrument variable (IV) estimation finds evidence of increased price dispersion on routes connecting states led by a Republican governor than those linking Democrat-led states. My analysis adds to the literature by exploiting the impact of political factors (i.e. demand shocks triggered by the COVID-19 policy interventions) on price dispersion using the latest data.

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  • Jihui Chen, 2025. "Political polarization and price dispersion: recent evidence from the airline industry during COVID-19," Applied Economics Letters, Taylor & Francis Journals, vol. 32(6), pages 817-824, March.
    • Handle: RePEc:taf:apeclt:v:32:y:2025:i:6:p:817-824
    DOI: 10.1080/13504851.2023.2289417
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