Aviation Security and Terrorism: A Review of the Economic Issues

Principal Investigator(s): Coughlin, Cletus, Federal Reserve Bank of St. Louis; Cohen, Jeffrey P., Federal Reserve Bank of St. Louis; Khan, Sarosh R., Federal Reserve Bank of St. Louis

Summary: Following the terrorist attacks on September 11, 2001, the passage of the Aviation and Transportation Act mandated a substantial increase in resources devoted to aviation security. This paper summarized the specific changes stemming from this legislation. In addition, the paper examines the economic issues underlying the regulation and provision of aviation security. The fact that security at one airport can affect the well-being of those at other airports and elsewhere, an example of a n... (more info)

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Coughlin, Cletus, Jeffrey P. Cohen, and Sarosh R. Khan. Aviation Security and Terrorism: A Review of the Economic Issues. ICPSR01267-v1. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2003-04-25. doi:10.3886/ICPSR01267.v1

Persistent URL: http://dx.doi.org/10.3886/ICPSR01267.v1

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Summary: Following the terrorist attacks on September 11, 2001, the passage of the Aviation and Transportation Act mandated a substantial increase in resources devoted to aviation security. This paper summarized the specific changes stemming from this legislation. In addition, the paper examines the economic issues underlying the regulation and provision of aviation security. The fact that security at one airport can affect the well-being of those at other airports and elsewhere, an example of a network externality (spillover), provides an economic justification for governmental involvement in aviation security. A fundamental question is whether the federal role should be restricted to setting and monitoring security standards or whether the role should also include the financing and implementation of security. A controversial change is that the federal government has assumed responsibility from the airlines and airports for the actual provision of aviation security. Proponents of this change argue that, relative to private provision, public provision reduces the incentives to reduce quality through cost reductions. On the other hand, a public agency might not provide security services efficiently because it can operate in a more-or-less monopolistic way. Furthermore, a public agency might provide an excessive amount of security and incur unnecessary expenses because it is likely to be judged on its security record and not on all the attributes encompassed by air transportation services for consumers. Thus, economic theory does not provide a clear answer to what is likely to be a continuing source of controversy -- the appropriate scope of governmental involvement in aviation security.

Subject Terms: aircraft security, airport security, counterterrorism, national security, public safety, security systems, terrorism

Geographic Coverage: United States

Data Collection Notes:

(1) The file submitted is the data file, 0209ccd.txt. (2) These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

Original ICPSR Release: 2003-04-25

2002

Coughlin, Cletus C., Cohen, Jeffrey P., Khan, Sarosh R. Aviation security and terrorism: A review of the economic issues. Federal Reserve Bank of St. Louis Review. 84, (5), 9-24.

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