Abstract
AbstractWeather forecasts are a rare example of public information which is, at the same time, relevant for agents' decisions and entirely exogenous for both sides of the (tourism) market. We develop a model where signals of good weather have a positive impact on accommodation prices, the effect being stronger the higher the accuracy of the forecast and the ex-ante uncertainty in weather conditions. Using data from a sea and sun destination, we estimate an augmented hedonic price model and find that results robustly support the theory. We also find that the response of prices to weather forecasts is larger for upper-scale hotels than for low- and mid-scale hotels, a result we link to the superior pricing capability of the former.
Funder
Fondation du Risque
Uni.Rimini
Università degli Studi di Milano
Publisher
Springer Science and Business Media LLC
Subject
General Economics, Econometrics and Finance
Cited by
1 articles.
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