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This study examines when firms offer higher product quality. We measure product quality by examining four different inflight amenities provided by airlines: Wi-Fi, seat size, entertainment, and seat power. Using daily flight level data for over 800 routes and spanning nine weeks in third quarter of 2015 we observe that carriers were actively retrofitting aircraft to expand their inflight amenity offerings. We find significantly lower product quality (Wi-Fi, entertainment, and power) on more concentrated routes. While considerable research has been done on airline pricing, less well known is how airlines pursue other revenue streams from ancillary services. Recent work by Brueckner et al. (2015) explores the role of baggage fees in airline pricing. We examine additional revenue streams provided by Wi-Fi and entertainment inflight amenities. We find that carriers are lowering the posted base ticket prices on routes with Wi-Fi and entertainment and then charging passengers for using these amenities. The IV price estimates reveal that magnitude of the posted fare reduction is larger than the additional revenue generated from the inflight amenity.

This article examines US airline mergers between 1993 and 2018 and studies their impact on the labor market. Our difference‐in‐differences estimates indicate a significant reduction in the merging airlines' long‐term wage and fringe benefits following the mergers. The effect is particularly salient among large‐scale mergers involving major airlines and low cost carriers. The results also suggest a negative short‐term employment impact of mergers that varies by occupation types. Our findings are consistent with the impact of merger‐induced monopsony power discussed in recent literature and offer important policy implications regarding how to account for employer monopsony power during mergers and acquisitions.

We distinguish between U.S. aid and non-U.S. aid and study the effects on growth in recipient countries. Our analysis exploits time variation in aid due to changes in the supply of U.S. aid and cross-sectional variation in a country's tendency to receive any U.S. aid. We find that U.S. aid has a positive effect on growth. In particular, U.S. economic aid has a positive effect on growth while U.S. military and food aid have no effect on growth. There is also no evidence of U.S. aid crowding out aid from other countries.

In this paper, we study the relationship among horizontal mismatch, job satisfaction and wages using data from the 2013 Scientists and Engineers Statistical Data System (SESTAT). Estimates from 2SL...

As of Aug. 2, 2021, 1693 injury claims associated with COVID-19 medical countermeasures have been filed in the Countermeasures Injury Compensation Program (CICP), of which 686 claims were related to COVID-19 vaccines and urgently needed compensation decisions. However, from an economic and public policy perspective, we find that the CICP design has unintended consequences: locating CICP in the executive agency DHHS potentially creates a conflict of interest, and not permitting judicial review generates a lack of checks and balances, both of which could jeopardize justice. These fundamental problems would subsequently weaken four key performance indicators of CICP compared with its judicial counterpart in the Court of Federal Claims. CICP lacks accountability, transparency, and cost-effectiveness efficiency, with 94% of its total costs spent on administration rather than compensation. CICP’s ability to compensate is also questionable. If COVID-19 claims were compensated at its historical rate, CICP would face around $21.16 million in compensation outlays and $317.94 million in total outlays, 72.1 times its current balance. To ensure just compensation for injured petitioners during COVID-19 and future public health emergencies, we recommend Congress (1) initiate a major reform by relocating CICP from DHHS to the Claims Court or (2) keep CICP within DHHS and make incremental changes by permitting judicial review of DHHS administrative adjudication of CICP claims. We further recommend Congress audit and adjust budgets for CICP and DHHS promptly propose an injury table for COVID-19 claims. This is the first study that contributes an economic perspective to the limited literature on CICP and also provides unique and rich economic data.

This paper highlights the widespread use of relational contracting in developed economies. While the number of empirical studies on relational practices in developing countries is increasing rapidly, evidence from industries and countries characterised by strong institutions is lagging behind due to data constraints. We argue that technological progress and strong institutions do not diminish the use of relational contracting, and use the US airline industry as a case in point. In particular, we discuss a number of factors (including transaction complexity, existence of collaborative relationships and data availability) that make this industry an ideal setting to study relational contracting in a developed economy. Moreover, we argue that other industries in developed countries share the properties of the US airline industry and, hence, can be used as a basis to investigate relational contracting in future work.

This paper examines the impact of labor unions on firms' quality provisions through the lens of the U.S. airline industry. Leveraging quarterly carrier-route level data on flight frequencies and on-time performance from the Bureau of Transportation Statistics from 1993 to 2019, our difference-in-differences estimates suggest that for both legacy carriers and low cost carriers, union representation is associated with a significant deterioration of product quality across different dimensions of airline quality provisions. By providing systematic product-level evidence of the product quality impact of unionization between carriers of different types, our study contributes to the understanding of airline labor unions and offers important management and policy implications.

This paper examines US airline mergers between 1993 and 2018 and studies their impact on the labor market. Our difference-in-differences estimates indicate a significant reduction in the merging airlines' long-term wage and fringe benefits following the mergers. The effect is particularly salient among large-scale mergers involving major airlines and low cost carriers. The results also suggest a negative short-term employment impact of mergers that varies by occupation types. Our findings are consistent with the impact of merger-induced monopsony power discussed in recent literature and offer important policy implications regarding how to account for employer monopsony power during mergers and acquisitions.

Using a correspondence study in the accountant job market in China, this paper studies whether getting married or being a parent harms women during the recruitment process. We find that getting married decreases the probability to receive a call back for women by 3 percentage points on average. This represents a decrease in callback rates for women by 30%. On the other hand, getting married increases the probability of receiving callbacks for men on average. However, the negative effect on married women is driven by the discrimination against married women with no children and married women with one child whose age is closer to the perceived optimal age to have children. For married women with two children, the effect completely cancels out the negative effect of married with no children. Our results suggest that employers discriminate against married women mostly due to the imminent costs associated with maternity leave and not due to the perceived reduction in productivity for married women who need to care for children.

In contrast to the extensive literature on behavior bias by individuals, studies on behavior bias by firms have been relatively scarce. We explore the possibility of the latter in the context of U.S. airlines, where fuel hedging leads to lump sum gain or loss which is sunk to airlines' pricing decisions. Our results show that the (sunk) hedging gain or loss affects airlines' ticket prices. In particular, a 10% reduction in the reported fuel cost (due to hedging gain) leads to a 2.2% reduction in ticket prices. Moving onto non-price decisions, we find that hedging gain leads airlines to use larger aircrafts and reduce airtime of their flights, but has no impacts on the number of routes and flights which airlines operate. Our results provide empirical evidence that fixed/sunk costs can affect firms' price and non-price decisions, establish a link between financial market and product market competition, and have important welfare/policy and managerial implications.

This paper studies the impact of competition on quality provision in the US airline industry exploiting a novel source of exogenous variation in competition. While mergers among market incumbents may stifle competition, a merger may increase the probability of entry if the merging airlines were not operating prior to merger in the market but each of them had presence at different route endpoints. We find non-merging incumbent airlines increase their flight frequency upon entry threat and accommodate entry of the newly merged airline by lowering flight frequency upon entry. While non-merging incumbents reduced arrival delays only upon entry of the newly merged airline, we find that incumbents decrease their cancelation rates and departure delays both upon merger announcement and entry of the newly merged airline. Our evidence suggests an increase in competition may increase consumer surplus, because non-merging incumbents increase quality and convenience, while keeping their prices unchanged.

We study the impact of tacit collusion on price dispersion in the U.S. airline industry. We find that tacit collusion driven by multimarket contact has a positive effect on prices, but a negative effect on price dispersion. Our empirical results suggest that airfares throughout the price distribution increases, yet the price distribution becomes more compressed since 10th percentile airfares increase by a larger amount than 90th percentile airfares. Moreover, we also find that this pricing phenomenon does not exist if Southwest Airlines is present on the route. Thus, route-level price competition is softened when the same airlines directly compete more frequently, except when Southwest Airlines services that route. As such, our empirical analysis provides evidence that the presence of Southwest Airlines exhibits an anti-collusive effect.

We study relational contracts as a means to govern transactions across firm boundaries. We focus on the airline industry, where real-time adaptation of flight schedules under bad weather is not formally contractible, and yet is essential for performance and long-term profitability. While outsourcing reduces the operating costs of major airlines, it increases their risk of failed adaptation due to a loss of control in favor of the regional partners. We theoretically show that majors and regionals can implement efficient rescheduling through self-enforcing relational contracts if their partnership’s present discounted value (PDV) outweighs the total adaptation cost. Using the beginning of the 2008 crisis as an exogenous shock, we find that, consistent with the centrality of relational contracts in governing airline partnerships, outsourced routes in networks with higher total adaptation cost, and hence higher PDV, were more likely to remain outsourced to the same partner after the crisis.

Do women pay more than men for similar housing? We utilize repeat-sales housing transactions drawn from ZTRAX to examine if gender gaps exist in house purchase prices and loan to price ratios. Our analysis utilizes repeat-sales and include house and neighborhood-by-time fixed effects to control for unobserved differences in the quality of houses and their associated neighborhoods. We find that female homebuyers pay a 2% premium on average. In addition, female homebuyers’ loan to price ratio is 3 percentage points lower than that of male buyers. We also show that female buyers pay less when the seller is female than when the seller is male. However, the gender price differentials and loan-to-price differentials are disappearing in more recent years. Our estimates have implications for the levels and persistence of gender differences in homeownership and wealth accumulation.

In 2010, Spirit airlines announced that it would start charging passengers for carry-on baggage. Using a vector of route level characteristics, we construct a matched group consisting of routes which best match those served by Spirit (treated group). We then run a diff-in-diff estimation using the treated and matched group, and examine the impact of Spirit's baggage fee policy on its rivals' ticket prices. Our results show that Spirit's rivals reduce their prices by about 5.8% after Spirit charges carry-on baggage fee. Looking into potentially heterogeneous impacts, we find that the policy impact is smaller on low-cost carriers relative to legacy carriers. We also take into account subcontracting status. Relative to non-subcontracting carriers, those which subcontract operations to regional carriers reduce their prices further by more than 10%, including average price (linear or log) and various points on the price distribution. We also develop a stylized theory model to help better understand our empirical findings.

Although a number of studies have been conducted to explore the effect of water quality improvement, the majority of them have focused mainly on point-of-use water treatment, and the studies investigating the effect of improved water supply have been based on observational or inadequately randomized trials. We report the results of a matched cluster randomized trial investigating the effect of improved water supply on diarrheal prevalence of children under five living in rural areas of the Volta Region in Ghana. We compared the diarrheal prevalence of 305 children in 10 communities of intervention with 302 children in 10 matched communities with no intervention (October 2012 to February 2014). A modified Poisson regression was used to estimate the prevalence ratio. An intention-to-treat analysis was undertaken. The crude prevalence ratio of diarrhea in the intervention compared with the control communities was 0.85 (95% CI 0.74–0.97) for Krachi West, 0.96 (0.87–1.05) for Krachi East, and 0.91 (0.83–0.98) for both districts. Sanitation was adjusted for in the model to remove the bias due to residual imbalance since it was not balanced even after randomization. The adjusted prevalence ratio was 0.82 (95% CI 0.71–0.96) for Krachi West, 0.95 (0.86–1.04) for Krachi East, and 0.89 (0.82–0.97) for both districts. This study provides a basis for a better approach to water quality interventions.

We analyze the effect of competition on price dispersion in the airline industry and show that the outcome hinges on redefining the extent of a market. Using panel data from 1993 to 2013, an increase in competition has a positive effect on price dispersion in one-way markets but a negative effect in round-trip markets. This is driven by a bigger (smaller) decrease in the 10th percentile of the price distribution in the one-way (round-trip) markets. We provide suggestive evidence that airlines compete more aggressively in the lower tail of the price distribution in one-way markets due to higher markups.

In this paper we study the relationship between job satisfaction and wages using data from the 2013 Scientists and Engineers Statistical Data System (SESTAT). Job satisfaction is positively correlated with wages, however, this effect diminishes as job satisfaction increases, suggesting more satisfied workers are not earning more. This non-monotonic effect is particularly strong in the 20-39 age group. We find that one standard deviation increase in job satisfaction from the 25th percentile is associated with a 12.3% increase in wages, while one standard deviation increase in job satisfaction from the 75th percentile is associated with a 7.3% change in wages. These patterns are consistent with a search and matching model that imposes a negative search cost for higher wages, but less reward in higher wages from a concave utility function in wages.

This study examines early career outcomes (i.e., tenure and promotion) of the Economics Ph.D. class of 2008. We find that relative to males in the same cohort, female economists are less likely (by 9.6%) to have received tenure and promotion during the first eight years since graduation. The gender gap becomes more pronounced, or 12%, among individuals of foreign origins working in the U.S. In addition, we find a similar gender bias regarding whether an individual remains in academia since the initial job placement in 2008. In particular, female faculty, particularly international women working in the U.S., are more likely to quit than their male counterparts in their post-doctoral careers. Compared to the existing literature, our sample includes a wide range of 57 U.S. economics programs, rather than a handful of top programs. Furthermore, we examine a new and growing dimension of the labor market for economics Ph.D.'s, i.e., women and internationals.

This paper estimates the causal relationship between job satisfaction and worker productivity. Using personnel records from a retail bank in South Korea, we show that branch productivity is positively associated to average job satisfaction, but negatively to its standard deviation. We address endogeneity concerns using IV strategies and find that while higher job satisfaction may increase short term productivity through sales to existing customers, excessive sales to existing customers may hurt customer satisfaction and willingness to recommend in the long run. Our findings suggest that average job satisfaction and its dispersion are equally important to understand worker productivity.

Category management is challenging for retailers that sell thousands of products across hundreds of categories and often lack the resources and capabilities to manage all of them intensively. Picking one supplier to be the category captain (CC) to manage the category – including rival’s brands – through pricing and merchandising is a recent retail management initiative that aims at improving a retailer’s overall performance in a product category. Despite tremendous retailer and manufacturer interest in CC and its adoption in the industry, much uncertainty exists about the consequences of CC. This paper empirically examines the role of CC by utilizing a unique data set on ready-to-eat cereals category, characterized by high concentration and market power, before and after the transition into category captain management. We find that after the transition, CC acted to improve its own market shares and those of private labels. A private label is designating a product under the name of the retailer rather than the name of the manufacturer and often offers higher profit margins for the retailer. In addition, CC improved its market shares by focusing on its core competency brands at the expense of some of its smaller brands while CC improved private labels’ market shares through an uniform increase across all private label brands. Using estimates from a structural model, we find consumer welfare is increased by 8.8% after the transition into category captain management.

In this paper we study the impact of competition on the provision of quality in the US airline industry. Using changes in competition triggered by LCC entry and airline mergers, we find that an increase in competition increases the provision of quality of major incumbent and non-merging airlines by increasing the number of flights and seats available in a route as well as improving their on-time performance with less frequent cancellations and flight delays. Contrary to previous findings in the literature, our evidence suggests that an increase in competition unambiguously increases consumer surplus since prices go down and quality goes up.

In this paper, I present a dynamic oligopoly model of Airbus, Boeing, and used aircraft markets and employ a unique dataset to examine the interaction between innovation, production, and the used goods markets. My findings show that firms increase the development of new products in response to used goods markets. Moreover, a reduction in government production subsidies has a minor effect on innovation, while a reduction in government R&D subsidies leads to a delay in innovation. Finally, a change in market structure from a duopoly to a monopoly decreases innovation in the presence of used goods markets.

We report on the design and construction of an ultrahigh vacuum compatible cryogenic manipulator for angle resolved photoemission spectroscopy. Unlike designs that have been used so far, our design allows five motions (three translational and two angular) without a differentially pumped rotary feedthrough. The design greatly reduces the sample motion upon rotation, which is crucial in automatic data acquisition over a large area in the momentum space. The constructed manipulator shows smooth motions in vacuum and the lowest temperature it could reach is about 8K at the sample position. Angular reproducibilities are found to be about 0.02° for both of the angular motions. The wobbling motion from the rotation around the vertical rotation axis is found to be virtually nonexistent (less than 0.1mm).