The Hidden Costs of Extra Airport Security

Nate Silver:

Nevertheless, this is more than just some sort of wedge issue for yuppies with wanderlust: there are real and quite tangible consequences stemming from the procedures that the T.S.A. chooses to implement.

Consider what happens, for instance, when travelers are inconvenienced by a new security procedure. Yes, most of them will simply pass through the new body-scanners without incident, buy a snack at the Cinnabon, and go on their merry way. But others will do something different: they will be sufficiently annoyed by the procedures that they will decide not to travel by air the next time they have the choice.

In the past, more cumbersome security procedures have had deleterious effects on passenger demand. A study by three professors at Cornell University found, for instance, that when the T.S.A. began to require checked baggage to be screened in late 2002, it reduced overall passenger traffic by about 6 percent. (You can actually see these effects a bit when looking at the air traffic statistics: passenger traffic on U.S.-based airlines dropped by about 6 percent from the fourth quarter of 2002 to the first quarter of 2003 — greater than the usual seasonal variance — even though the economy was recovering and travelers were starting to get over the fear brought on by the Sept. 11 attacks.)

More stringent security procedures, in essence, function as a tax upon air travel, and produce a corresponding deadweight loss. Teleconferences are often a poor substitute for person-to-person interaction, and when people are reluctant to travel, some business deals don’t get done that otherwise would have. Recreational travelers, meanwhile, may skip out on vacations that otherwise would have brought them pleasure and stress-relief (while improving revenues for tourism-dependent economies). The tenuous profits of the airline industry are also affected, of course. Revenue losses from the new bag-checking procedures may have measured in the billions, according to the Cornell study.