Safety That Kills
We still don't know what brought down TWA Flight 800 last July–lately, investigators have been speculating again about a catastrophic mechanical failure–but that has not stopped the federal government from responding with measures aimed at thwarting terrorism. Immediately after the explosion, President Clinton ordered several changes in airport security procedures and appointed a commission headed by Vice President Al Gore to suggest more. Most of the panel's recommendations were soon implemented by Congress.
As the economist Robert W. Hahn, a resident scholar at the American Enterprise Institute, notes in the Winter 1996 issue of Regulation, neither the White House nor Congress gave much thought to the full costs of these measures or the benefits that could reasonably be expected. In addition to the roughly $400 million that Congress has allocated, Hahn counts billions of dollars in expenses. At the standard rates used by the Federal Aviation Administration, delays resulting from the changes already implemented (travelers are supposed to arrive a half-hour earlier) represent something like $9 billion a year. Additional baggage screening devices and full matching of passengers to luggage will cost $4 billion or so. That figure does not include additional delays, which could amount to another $9 billion a year for luggage matching alone.
On the benefit side of the ledger, Hahn makes the generous assumption that the improvements will prevent all sabotage of U.S. airliners–saving, on average, 37 lives a year. Considering only the costs of the security measures already in place, each life saved would cost more than $200 million. By contrast, research indicates that air travelers put an implicit value of $5 million to $15 million on their own lives, while the FAA uses a value of $2.3 million per life saved to assess its regulations. Furthermore, because of delays and higher costs, some travelers who would have flown will instead choose to drive, a riskier mode of transportation. Hahn estimates this shift will result in 60 extra deaths a year, so the security measures will probably lead to a net increase in fatalities.