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The Impact of Post-9/11 Airport Security Measures on the Demand for Air Travel

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  • Garrick Blalock
  • Vrinda Kadiyali
  • Daniel H. Simon

Abstract

We examine the impact of two post-9/11 airport security measures—baggage screening and federalization of passenger screening—on demand for air travel in the United States. Exploiting the phased introduction of security measures across airports, we find that baggage screening reduced passenger volume by about 6 percent on all flights and by about 9 percent on flights departing from the nation’s 50 busiest airports. In contrast, federalizing passenger screening had little effect on passenger volume. We provide evidence that the reduction in demand was an unintended consequence of baggage screening and not the result of contemporaneous price changes, airport-specific shocks, schedule changes, or other factors. This decline in air travel had a substantial cost. Back-of-the-envelope calculations indicate that the airline industry lost about $1.1 billion because of the decline, which is 11 percent of the loss attributed directly to 9/11.

Suggested Citation

  • Garrick Blalock & Vrinda Kadiyali & Daniel H. Simon, 2007. "The Impact of Post-9/11 Airport Security Measures on the Demand for Air Travel," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 731-755.
  • Handle: RePEc:ucp:jlawec:v:50:y:2007:p:731-755
    DOI: 10.1086/519816
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    References listed on IDEAS

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    1. Paul Seidenstat, 2004. "Terrorism, Airport Security, and the Private Sector," Review of Policy Research, Policy Studies Organization, vol. 21(3), pages 275-291, May.
    2. James A. Brander & Anming Zhang, 1990. "Market Conduct in the Airline Industry: An Empirical Investigation," RAND Journal of Economics, The RAND Corporation, vol. 21(4), pages 567-583, Winter.
    3. Brueckner, Jan K & Spiller, Pablo T, 1994. "Economies of Traffic Density in the Deregulated Airline Industry," Journal of Law and Economics, University of Chicago Press, vol. 37(2), pages 379-415, October.
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    Cited by:

    1. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2010. "The Economics of Terrorism and Counter-Terrorism: A Survey (Part I)," Discussion Papers of DIW Berlin 1049, DIW Berlin, German Institute for Economic Research.
    2. Mark G. Stewart & John Mueller, 0. "Risk and economic assessment of expedited passenger screening and TSA PreCheck," Journal of Transportation Security, Springer, vol. 0, pages 1-22.
    3. Wang, Xiaofang & Zhuang, Jun, 2011. "Balancing congestion and security in the presence of strategic applicants with private information," European Journal of Operational Research, Elsevier, vol. 212(1), pages 100-111, July.
    4. Hagmann, Carmen & Semeijn, Janjaap & Vellenga, David B., 2015. "Exploring the green image of airlines: Passenger perceptions and airline choice," Journal of Air Transport Management, Elsevier, vol. 43(C), pages 37-45.
    5. Michael F. Pesko, 2014. "Stress And Smoking: Associations With Terrorism And Causal Impact," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 351-371, April.
    6. repec:spr:jtrsec:v:10:y:2017:i:1:d:10.1007_s12198-016-0175-0 is not listed on IDEAS
    7. Severin Borenstein & Nancy L. Rose, 2007. "How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry," NBER Working Papers 13452, National Bureau of Economic Research, Inc.

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