Over the past forty years, one of the most important datasets in industrial organization has been the Airline Origin and Destination Survey (DB1B). Most studies relying on these data remove tickets with fares less than $20, assuming that these are heavily discounted frequent flyer awards (FFAs)....

Over the past forty years, one of the most important datasets in industrial organization has been the Airline Origin and Destination Survey (DB1B). Most studies relying on these data remove tickets with fares less than $20, assuming that these are heavily discounted frequent flyer awards (FFAs)....

One competitive-market explanation of interindustry wage differentials that is not challenged by the persistence of these differentials is that they are due to differences across workers in unobserved ability or quality. In contrast, this paper explores the unobserved ability hypothesis by using...