> Price discrimination (charging people more who can afford more) can be good for low-income customers.

Unfortunately it doesn't work out that way. Consider banks, for example. As a relatively wealthy person, I don't pay fees for practically anything. On the contrary, banks pay me in the form of new-account signup bonuses, interest-bearing checking accounts, ATM fee reimbursements, etc.

Poorer bank customers, on the other hand, are continuously getting nickeled-and-dimed by banks in the form of monthly account fees, foreign ATM fees, NSF charges, etc.

Likewise, poorer customers are less able to avoid this kind of price discrimination at the grocery store.

If you walk or take the bus to the grocery store, you have fewer grocery stores to shop around for a deal at. If you're living paycheck to paycheck, you're less able to stock up on, say, cold medicine, when you see a good deal (and more likely to pay the "we know you're sick" price). And if you're time-poor (because you're working two jobs, and neither are the kind you can browse the Internet at while your code is compiling), you're less able to do comparison shopping, or notice that the price of what you need is always more expensive than when you don't.

If you somehow arrange for a redistributive effect. But in practice, the firms are likely to charge each consumer the maximum that consumer can afford. These firms are not engaging in some philanthropic process here.

If you want redistribution, implement a wealth tax.

Are there any examples of markets where price discrimination is good for the average consumer? Airline travel is the one that pops to mind - first class customers pay well above marginal cost and effectively subsidize the cattle class, right?

If this was the case and the cattle class would cause airlines to lose money you would definitely see airlines flying smaller planes just for the first class.

Most likely what happens is that cattle class pays for the plane to fly, and airlines make more from first class.

In the long run it would be strange for this to be the case, no? What are the economic forces that give rise to this? Maybe sometimes recessions affect poorer people more, and first class tickets smooth out revenues?

But in the long run, we've seen a steady worsening of the economy experience as airlines have invested in improved first class experiences. In the long run it's simply impossible for a firm to serve poor people (they have no money), absent interventions that allocate buying power to the poor person, or others that force the firm to do so.

I think the worsening economy class situation is simply consumer choice. Discount carriers offer worse service for a (sometimes minimally) lower price. People pick that, so other airlines do the same (or they would loose customers).