Impact of Flight Emissions Information on Consumer Demand: Evidence from the US Airline Industry
This paper estimates how emissions disclosures on flight-booking platforms affect consumers’ willingness to pay for flights with lower carbon intensity.
Abstract
Flight-booking websites, such as Google Flights and Skyscanner, increasingly display estimated CO2 emissions for flight itineraries, but little is known about whether this information affects booking decisions. We study how emissions disclosure affects consumers’ flight choices using US domestic flight data from 2018 to 2022 and a discrete-choice model and find that it increases consumers’ sensitivity to flight emissions. In our preferred specification, the absolute value of the emissions elasticity of demand increases from 0.23 in the predisclosure period to 0.28 in the period following the first disclosure. Expressed in willingness-to-pay (WTP) terms, the implied WTP for emissions reductions is $33 per ton higher in the postdisclosure period. Counterfactual simulations suggest that mandating emissions disclosure across all flight-booking platforms would further strengthen consumers’ responsiveness to emissions information.
Keywords: Willingness to pay, Carbon emissions disclosure, Discrete-choice model, Aviation
JEL codes: D12, D83, L93, Q58
