To obtain some limited price data, choose any city-pair and two competing airlines. A network and low-cost-carrier make an interesting comparison, but any airlines of interest are acceptable. For each airline, obtain the 4 prices for a typical round-trip itinerary with bookings 1 day in advance, and then for 1, 2 and 4 weeks in advance of the departure date. Itineraries with closer departure dates are more likely to be purchased by business travelers. Leisure travelers, on the other hand, usually book well in
advance of the travel date.
To isolate the effects of advance purchase, the itineraries should depart and return the same days of the week at approximately the same times of day. Try to avoid the influence of holidays or other seasonal effects on demand. Use the airlines' websites for all fare information.
In a short paper, first explain the theory of 3rd degree price discrimination as it applies to the airline industry including a graphical model. Explain how and why airlines would choose to practice price discrimination. Next, discuss your research methodology including the choice of airlines, the itinerary, and source data. Then, present the data. A simple table may be the best method for showing the itineraries and fares. Finally, discuss whether the data provide evidence of price discrimination. Draw appropriate conclusions.