Martin is a piano teacher who wishes to price discriminate across his students based on their household income. What would be a simple, verifiable characteristic for him to use as a proxy measure of income?

Question

Quizplus · Accepted Answer

Using a student's address as a proxy measure of income is a common practice in pricing discrimination. This is because certain areas or neighborhoods are associated with higher or lower income levels, making it a verifiable and simple characteristic for Martin to use. Hair color, parents' musical background, and age are not reliable indicators of household income.

Martin Is a Piano Teacher Who Wishes to Price Discriminate