The cheapest time to get your airline tickets is 8 weeks in advance, says an economist who came up with a fancy formula, ∏A = gUG + min(k-g, (1-g)(1-r)), to figure it out.

Here’s a sample:

Prices for EasyJet flight booked in advance as of 21 August
London Stansted (STN) to Munich (MUC)

1 day = £82.99
1 week = £98.99
2 weeks = £62.99
8 weeks = £19.99
12 weeks = £25.99

Basically it comes down to paying for risk. When you buy tickets, you are taking the risk that you might later have to change your travel plans. The longer out you buy, the more likely it is something might crop up. Airlines offer advance purchase discounts in order to induce consumers to take that risk. Why the price dips at 8 weeks exactly, and then starts rising again, I guess you’ll have to read the latest edition of the Economic Journal to find out.

Why ∏A = gUG + min(k-g, (1-g)(1-r)) equals low airline fares [Observer via Lifehacker]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.