Deep habits and travel resilience after COVID-19

This research examines how deep travel habits in the form of habit formation and reduced substitutability between tourism travel and other leisure goods impact travel resilience after COVID-19. Using microdata for almost 3000 tourists in Andalusia (Spain), we relate post-pandemic outbreak tourism participation to pre-pandemic travelling intensity and whether taking a vacation is considered a priority good. In doing so, we control for standard sociodemographic characteristics and province fixed effects. Our results clearly show that the probability of continuing travelling during the summer of 2020 is positively associated with pre-pandemic travel intensity and tourism being considered a priority leisure activity. Travel resilience is found to be strongly associated with income, education level and the tenure of a second residence.

Behavioral Biases Meet the Market: The Case of Magazine Subscription Prices

Using data from American magazines, we explore the relationship between newsstand and subscription prices and magazine characteristics. In particular, we distinguish between magazines that provide benefits in the future (investment magazines) versus those that are simply fun to read now (leisure magazines). A consumer with a present bias at the newsstand discounts the future payoff of the investment good but fully values the leisure good. This difference does not exist for subscriptions. Thus, the ratio of the subscription to newsstand willingness to pay for a magazine should differ between investment and leisure goods. We find that for magazines whose payoff is in the future, subscriptions are relatively more costly, ceteris paribus. This finding suggests that publishers reflect the present bias preferences of consumers in their price setting behavior.