Economist Debate: Is TSA worth the cost?

Great Debates
101

I don’t need a reminder. When we lose orders of magnitude off the number in question, you turn $30 an hour into $0.3 an hour. I know that thirty cents an hour isn’t exactly zero. So would, I imagine, everyone reading our exchanges.

Compared to what?

I don’t know how this figure in particular was calculated. I do think, for the sake of argument, the method you propose to calculate it is pretty decent, in lieu of doing massive research. I think your method is a good first approximation. What I don’t think is reasonable how you interpret your method.

That’s why your position is stupid. The median annual wage is about $27k, or around $13 an hour. Do you think this is a good representation of the median wage of air travelers? I don’t. I think the median wage would significantly underestimate the median wage of an air traveler. The number you offered earlier was 880 million… something. One-way trips? I guess probably one-way trips, given the population of the US. Do you suppose that there are a significant number of people, like business travelers, who frequently fly and who are counted several times? Like me? I don’t make $27k a year. If, in a slow year, I travel one-way 30 times, that would significantly shift the median income of those 880 million one-way trips, wouldn’t it? Me and my 29 clones would crowd out a lot of kids.

Hopefully we have covered your problem with statistics now, too, and we can move back to the main topic.

According to your tea leaves.

No, it doesn’t imply that at all. A pack of gum on the shelf at the CVS down the street costs $1. That’s not an objective value. That’s a price. It’s based on the prices of a zillion other things in the market. It’s relative to the entire economy, including the agents who like gum, and who don’t.

According to your tea leaves.

According to your tea leaves.

Revenue, eh? I thought we had already covered the problem with your accountant’s attitude.

This is an absolutely excellent question. More pressing is why would anyone buy them at all if their time has such a small value? Another one comes to mind, like Do you really suppose the median income of Six Flags attendees is the same as the median income of one-way-trip-passengers at airports? Or how about, Do you think people go to amusement parks on the company’s dime? Of particular interest might even be, Do you think the average attendee of an amusement park would enjoy non-stop rides? (My guess is that they would not, having been to an amusement park before.) Lots of really stellar questions here for you to dig yourself deeper into trouble.

In fact, that is probably why the price is what it is: to stop everyone from buying them. As you might imagine, if 40% of the population bought them, you wouldn’t be saving so much time, would you? Yep, lots of fascinating ideas here for you to probe with your hypothesis. Sooner or later we might actually get to the point where you are able to put some dollar value on anything at all.

Sounds like a great business opportunity, except that airport space is also limited and there is not an endless supply of TSA agents (they have to come from somewhere… like other industries) so you might start seeing that nothing is free here and this is why we look at opportunity cost, not accounting cost.

I’m not asking you to write a paper for publication. I have admitted this “wage idea” is fine for a first approximation; it isn’t very good, but I’m willing to work with it just to flesh out the discussion. I am far less critical of sketches of propositions for being sketchy than I am of their complete absence. Which have you offered me?

How?

It has everything to do with it. They’ve already had their fill of shit they’re willing to do for someone else. Now you’re cutting into time which society broadly prices at 150% of base hourly wages.

Context does matter, because context constrains our choices. So while I cannot expect to have sex or get a long nap in, I can expect to do things like eat or talk on the phone. Personally, I value these activities. I will take time out of my schedule to ensure I stay in touch with friends and family. For the first 40-50 hours of work, I think getting money for a nice apartment and decent food is worth it, but after that I stop valuing the money I get for work and start valuing my time more.

Because people have already decided whether the benefits of laces are worth the cost. There’s nothing untoward going on here. But the TSA is a government program we’ve enacted. Therefore it makes sense to look at the costs of that decision, because it wasn’t chosen freely by people participating in the market. We can look at the cost and decide whether it is worth it (or we could, if anyone could estimate the benefits—I’d like someone to pull a number of of a suitable ass here).

102

Why would you suppose that the real estate prices in Manhattan are representative of real estate everywhere?

brickbacon has brought up this wage idea, which is not bad, and we’ve back-calculated a $34/hour equivalent for this, or around $70k a year. It’s not too bad. It sounds like a reasonable figure to me. Yes, it is higher than the median wage, but I would expect the median wage of people flying to be higher than the entire US’s median wage—after all, they can afford to fly, sometimes multiple times, sometimes paying for their whole family, some of whom don’t even bring in wages. Additionally, the extra wait time would presumably have an effect on the standard deviation of wait times, too. If before you could arrive 45 minutes before the flight and have a three sigma expectation of making your flight, now it might have to be much more. 20 minutes is the “average” wait time, but planes don’t wait for averages, so adding 20 minutes (plus increasing the standard deviation somewhat) on top of that is really pretty significant, because it means people aren’t arriving 20 minutes earlier, they’re arriving 30 or 40 minutes earlier (personally 45 went to 90 for me, and sometimes I’ve cut it damn close because of it). This would turn $34 into something like $17. If someone paid me $17 to stand in line all over again, I probably wouldn’t do it on average, but you might catch me in a mood. Suppose there’s 50 people in front of me, then someone could pay each individual thirty-four cents to cut? Yeah, I don’t think that would go over too well. So yeah I think this method severely underestimates the actual cost but it isn’t so bad we can’t use it for the purposes of a debate.

So, yeah: not bad. You selecting one of the most expensive real estate markets in the country is clearly bad and I have a hard time understanding why you think this is how people would come up with the figure in question. A very hard time.

103

What the hell are you talking about?

Compared to using an accurate account of the opportunity costs, or using what people would actually pay to avoid waiting.

You implied you did.

I doubt its that far off. Considering the number of kids in college that fly, and that most airline travel is for leisure purposes, I doubt the number is THAT far off. It’s not 1965. Airline tickets are not very expensive.

I double checked those numbers. In 2010, there were 631,939,829 passenger departures in the US. That means our number need to be corrected to $48.69/hour or $97,380/year . Now, you may a valid point. Airline flyers are probably slightly richer than average. The median income for persons, age 25+, employed full-time, with a bachelor’s degree or higher is $56,078. A salary of 97k puts you in the 93rd percentile income wise. Do you really think people who fly are that disproportionately rich?

Because 4 or 5 hours of one’s time is of greater utility, and of more value to someone than 20 minutes at an airport. More importantly, I don’t doubt there are plenty of people who value their time at those rates and higher. What I reject is that the average person in an airport really does.

Then the price should be MUCH, MUCH higher.

Oh, bullshit. I can hire tons of TSA agents tomorrow. If people really value the time that much, why isn’t there a fast lane you can pay for?

Wrong again. You stated it take more money to make some work (for example) the 15th hour of a day than it would the 1st. That is common sense, and it has less to do with how people value time, and more to do with physical exhaustion and mental fatigue. Even so, the fact that, even working people make distinction between the value of their time in different contexts (eg. the value of the first hour of work is not equal to every other additional hour) means that we must consider the context in the TSA case. What else could you possibly do in 20 minutes at an airport? You mentioned talking on the phone. You can do that while waiting in line. Eating? You can generally do that too.

Exactly. Now explain to me why you think the opportunity costs in the context of a guy waiting at the airport are anywhere near the value we calculated.

The same could be said or airline travel. People decide waiting is worth it when they buy a ticket.

Just as Nike instituted a shoe-lace policy. The fact that it’s a government program makes no difference.

But either way, this is getting tedious because you are either unable or unwilling to comprehend what is being said to you. Unless you can justify people valuing their time at nearly $50/hour, we can just agree to disagree.

104

I’m waiting. Shoot.

Are you kidding? 56% of people travel for leisure, and you think these are all McDonalds workers or something?

No. And as I said, I think the “wage” method you’ve proposed is the basis for these numbers would underestimate the cost in question, which implies, therefore, that if we back-calculate the wage method from the cost described we would tend to have overestimated the wage. Chessic proposes at least an order of magnitude (“less than 1 billion”), you’ve offered basically nothing but unsupported rejection so let’s roll with Chessic’s suggestion less than one billion. Like, 900 million, I guess? 750? Let’s roll with 900 million. Then 900/632 is 1.424 times 3 which would be $4.20 an hour. Interestingly, that is rather close to the $5 figure Chessic admitted he’d accept to go stand in line again. What’s even more interesting is he’d take it for 20 minutes, not the full hour, so we can just calculate it directly: 5x650million = 3 billion. Wow! Amazing. We’ve gone from over an order of magnitude to a factor of 3. If everyone valued time as little as Chessic, a hypothesis I think is questionable on its face, we’re a third of the way there already!

Interesting that you don’t suppose the “4 or 5 hours” was pulled out of someone’s ass.

I know you reject it. I don’t know why, or what you suppose could stand in place of your interpretation.

Obviously not. You’ll note part of the thing promoted in your link is a lot closer to regulating the flow of traffic than cutting ahead in line and that the alternate method, which really is just standing in a special line at your whim, isn’t quite as good of a value.

From where? Your inability to recognize how markets function is astounding. People don’t grow on trees.

Good question! At Logan (Boston), I seem to remember that there is, in fact, such a line. It’s called “buying a first class ticket.” Pretty pricey, aren’t they? Hmmm…

You are digging yourself a hole to China. Yes, of course it has to do with exhaustion—time is a scarce resource and some of it must be used for other purposes. Taking more and more of that time away increases the cost to take more of it. I’ve never, ever, ever been in a discussion with someone who was so intent on making my points for me.

Actually, I can’t carry food or drink from one side to the other. I can’t sit down and enjoy a beer. I can talk on the phone, you’re right, and some do. I have never disputed this “wage method” has its problems, but it is close enough to work with. But anyway, you are right, we should consider the next best use of time. You want this time to be spent at the airport. Why? Why wouldn’t I just arrive at the airport 20 minutes later?

Because it seems to me to be a decent general stand-in for what we pay people to do things they wouldn’t volunteer to do on their own when measuring alternatives is difficult or impossible. If there was a “20 minutes wait only!” security line, and a “just walk through” line, my assumption is that everyone would take the “just walk through” line. Perhaps you feel differently, that would definitely account for a discrepancy in the figure in question.

Indeed they do! You are 100% correct. You are 1000% correct. You could not possibly be more correct. Here’s the interesting thing: some people think flying is a bargain. They see it as a benefit. Some people see it as exactly worth the cost. Some people see it as not worth the cost (they don’t fly). So when we increase the cost of flying—by cash or by hassle or by time or by…—some of the people who thought it was barely worth the cost stop paying it and drop out. Some people who thought it was a major benefit think it is now not so much of a benefit, but still a benefit. In other words, their benefit decreased. This is commonly considered “a cost.”

It indeed makes a difference. We can stop giving Nike money and give it to Adidas or Puma or god knows who. New Balance, I don’t know. How do we adjust the TSA market? Oops… we can’t.

For that to happen, you’d actually have to have put forth a position to disagree with.

105

I can’t say you have. A cost or benefit that can not be calculated doesn’t exist.

The TSA has confiscated lots of guns. Did the people carrying them end up in Gitmo? I think most of them were regular gun-carrying Americans that honestly didn’t think before they went to the airport. Are they still allowed to fly? There may be a weakness in the system that could be taken advantage of here.

That was back in the romantic time of Che-worship, and those trips to Havana rarely killed anyone. They may simply have gone out of fashion along with Che.

Everything changed when a plane was used as a guided missile in a suicide mission. This is what is important to stop. We must make it absolutely clear that it cannot possibly work again. Reinforced cockpit doors may be enough, but installing self destruct mechanisms in all planes may be even more effective psychologically.

Another real risk is bombings like Lockerbie. The problem with bombings are that they are essentially random, and airplanes are actually one of the few places where we can possibly find them before they can be effective. This means that only a stupid terrorist would now try to put one on a plane. A large train station or other large gathering of people is almost zero risk for the bomb planter. Vans full of fertilizer is a proven method.

Yes, if we cannot make the security measures smarter, the TSA should employ lots more people. For two reasons: The current long queues are a security risk in themselves - a large gathering of people where a bomb would create world-wide panic, and because the higher costs would make changing the measures easier politically.

106

Indeed, how much would we have to increase TSA’s budget to decrease average waiting time (which I assume is the mean we’ve been discussing) by 20 minutes? I assume here that the standard deviation hasn’t changed, which is probably also false, I’d guess it increased, but I’ll roll with it for the sake of argument. Anyone care to estimate this?

107

When we “look at the cost and decide whether it is worth it” I don’t see the necessity to put an arbitrary dollar value on it. There is “hassle and inconvenience,” there are unpleasant “wait times” there are intrusive physical searches and meaningless security hoops to jump through. Those are the costs. Plus the cost of hiring the TSA workers and buying the machines [which we can put real numbers on].

And the “benefits?” Who knows. Maybe we have kept one plane from crashing into a cornfield or public school. Maybe we have done nothing of value. Calculating the “cost of waiting in line” doesn’t help us resolve the ultimate question here. If the damn thing works, the 19.5 minute wait times and searches are worth it (even at $10 billion). If the damn thing isn’t doing any good, it doesn’t make sense even if the “wait time cost” is only $100,000. You admit we can’t estimate the benefits, then why are we trying to estimate the cost with a [made up] dollar figure?

To repeat my original point just for emphasis. Waiting at the airport sucks. I do it 4 to 6 times every month. I sit in the Airline lounge and try to make the best of it, but it’s not quality time for me. Waiting in the TSA line is worse, but not a whole lot worse. The marginal “cost” to me, and I assume many travelers, is relatively minor. [plus, it’s not a direct relationship. An hour long wait is not twice as bad as a 30 minute wait. It’s about 10 times worse.]

[final plus: Although I can bypass the main security line at most airports given my “elite status,” I do see the lines and doubt the are really, on average, 19.5 minutes *longer *than they were before 9/11. The TSA has significantly reduced the lines at most US airports over the past few years]

108

I eagerly await your alternative analysis which is non-arbitrary.

109

I do it without assigning numbers. Boy, that TSA line is a huge hassle, is there a better way to achieve airport security? If there is, we go with it. If there isn’t, we stay with what we have.

110

It’s nice to see your robust and non-arbitrary method assumes the answer to the question, “Is TSA worth the cost?”

111

Does your $10 billion figure get you any closer to an answer? It’s completely useless. Would you do anything different if it was half that amount than you would if it was twice that amount? No, you wouldn’t. Because it’s not a real number. It’s a symbol signifying nothing tangible.

Or perhaps you’d be content with the current system if the number came it at $5 billion? or one billion? Or $100,000?

112

What method do you suggest we use to analyze whether a highway proposal is value-for-money if its benefits are measured in person-hours less spent in traffic?

113

All dollars are like that. It’s very interesting.

I don’t know, I want to hear the comparison of the benefits. It is hard to make a cost/benefit analysis when you only hear costs, even if you agree with them.

114

This makes me think you’ve never done this in real life. Not only have I done it - and gotten my group paid for from doing it, but we teach it now. Now, you can calculate pretty much anything. The problem is projecting benefits from things not happening. In this case, like in the stuff I do, the costs are fairly easy to measure but the benefits much less so. You do an earthquake retrofit, which costs big money. You can’t precisely calculate the benefit in the building not falling down since, first, you don’t know when the big one is going to hit and second, you don’t know where it is going to hit. You might live right on a fault, but if the earthquake on that fault happens a few hundred miles away, your retrofit might be useless.

People calculate benefit by assuming the probability of something happening. Earthquakes happen whether you retrofit or not. Where the problem comes in here is that the probability of a loss is dependent on the actions taken. I doubt there is any closed form solution for this.

One expects that they were checked out. So far, anyhow, your average terrorist isn’t an all-American NRA member.

Oddly the decrease was rather directly correlated with security, not decline in desire for a vacation in Cuba. You’re reaching.

The attempts since then have been bombings, not hijackings.

There have been train bombings, of course. However a smaller bomb can do more damage on a plane, and people can’t get away. If people find that a passenger has a bomb, he might wind up blowing up himself and few other people.
I think assuming that no terrorist will be stupid is kind of dangerous. And once you screen for bombs, you’ve pretty much caused the disruption you are against.

I don’t know about you, but I’m pretty up on what the next person in line is doing. There is also plenty of room to get away. Sure you would blow up a few people, but not enough to cause a panic.
But in any case, doing a cost benefit analysis of adding more lines is pretty straightforward.

115

I hope you don’t think i know little about the field just because we disagree. I know a bit about risk assessment and know that it’s a mature field with established methods of calculation for nearly all types of events.

And even worse, the probability of loss depends on what your neighbors do (fire risk). It does not mean that you can not calculate some pretty good outside bounds of probability.

Well, I live in Norway and have a slightly different perspective than you, due to recent history.

I’d say it correlated with both and that the causal relationship is difficult to put down exactly. I am confident the CIA and other intelligence agencies have statistics on the amount of sympathy different extreme viewpoints have around the world and use those in their risk assessments. Anything else would be scandalous.

Exactly, as my nest point tried to communicate. The risks of successful hijackings have gone down mostly due to different things than extra screening.

But a bomb can be so much larger on the ground so their effect is similar. The risk of capture is also a lot smaller.

Of course, I’d even say that the chances of smart terrorists targeting airplanes are very small, so were left with the stupid. But they are also easier to profile.

That is also probably why the current screening have a certain effect. A smart terrorist can easily get bomb making materials past security, and they can try several times without risk of arrest. Confiscated liquids are not tested. Lets only hope that no smart terrorist master mind starts training the stupid.

I think a coordinated bombing of several large security lines during a short period of time would create total panic and stop all airline traffic.

There are actual limits to how much cost and disruption we can tolerate. This is a simple fact. The world economy is fragile enough as it is.

I honestly can’t accept that we implement security measures without a cost-benefit analysis. The only alternative method of judging the different measures is the “dont-blame-me-I-did-everything-I-possibly-could-and-spent-a-lot-of-money” method usual in bureaucracies.

Do you know of any other way of judging if a security measure is good or bad?

116

It already is, and has been ever since Flgiht 93 went down in the middle of Backobeyond Pennsylvania instead of the middle of Washington DC.

117

Excellent example. Think of how the probability of your neighbor’s house burning down if the insurance company allowed him to insure it for more than replacement value. Hell, if I could insure my house for $5 million, and thought I’d get away with it, the kerosene would be out tonight. That sort of feedback between coverage/protection and risk is what I’m talking about. Besides, that, in the US there isn’t much of an incentive to burn down your home. But it happens. In California, at least, smoke detectors are legally required, and there is a fire code to reduce the chance of a fire that is deadly or which spreads. All this increases costs, of course. Just like inspections.
One of the things we lecture about in our economics of engineering class is the case where money you put into a design reduces failures later on - failures which could be used to justify the cost of putting the preventative features in. It used to be difficult to justify this cost because any doubters could say why do it since the parts never fail. They have different explanations also. That’s just like doubting the efficacy of searches because no one hijacks anything any more.

As terrible as that was, you will always have kooks. The hijackers to Cuba were all home-grown, as was Timothy McVeigh. But those are random events in some sense, not part of a war.

Having been alive at the time, I don’t recall any significant change in opinion about Cuba that correlated with the decrease in hijacking. In any case, most of the hijackers were not all that politically motivated, and the small number means that attitudes in general don’t matter. It was not a mass movement, after all. Plus, at the time no changes were made to on-board security, and no changes were made to boarding except for the screening. Thus the only changed variable was the screening, and, unless you have some data to argue otherwise, that’s the best explanation.

A larger bomb is more easily detected.

The smart terrorists hire the stupid terrorists. That was true of the Palestinians, and there is even a Richard Thompson song along similar lines, about the IRA.

The reason they have a limit is both to allow stuff on board in travel sizes but also because they know that in the current climate no one mixing up chemicals at his seat is going to get very far in his bomb making. That does help, sure, but he’d be a lot more successful if he could smuggle a ready-made bomb aboard.

Unlikely. The reason traffic was shut down after 9/11 was shock and uncertainty, and the risk to significant installations. There would be more security, and perhaps more spread out lines, but I doubt airline traffic would be much affected.

I’m sure the cost-benefit analysis has been done. My argument is not with them, but just that you are missing an important factor in them. I’ve just skimmed the parallel thread here, but while I realize that some people have a problem with assigning a value to a human life, it must be done. There are certainly more costly security measures which could have been put into place, and I believe they’ve backed off on some which weren’t all that useful. Right after 9/11 they were panicked to a certain extent. But it does seem to be working.

118

Bingo. I’m glad you see my point. Just like real estate prices are different in different places, hourly opportunity costs are different in different places. My overtime rate is higher than my first hour rate, which are both lower than my “3 a.m. on a Saturday” rate. My airport rate, like most travelers, is very low. About $5.

I don’t know if you did this on purpose and hoped no one would notice, or you just did it by accident, but you just took 900 million, did some math, rounded it, did some math, rounded it, did some math, and rounded that to come out with 3 billion, which you then rounded up to “a factor of 3”. Not to mention that the number of passengers was 632 million when you divided and 650 million when you multiplied.

You literally took my guessed cost of “900 million”, calculated the per-passenger rate, rounded that up to $5, then turned the 20-minute wait time into a full hour, and acted surprised that you came out with 3 billion. Yes, when you multiply “a little less than one billion” by three and round up, you get 3 billion. Good job. But that number doesn’t mean anything, since 650 million passengers don’t each wait an hour at a $5 cost.

And 3/10 still isn’t “a factor of 3”.

119

Like most travelers, eh? Because, if ten billion was just pulled out of someone’s ass, your “about $5”—which leads to over 3 billion dollars cost all on its own, contrary to your “less than one billion” claim—is perfectly supported and totally objective? No. No, it isn’t. You can put it back from whatever hole you pulled it out of.

I don’t know if you noticed, but 632 million times five dollars is only three billion if you round down, an action which would be in your favor. But please, continue this dispute. It’s only helping my point.

Buddy, it was your suggestion that $5 be the number, which amounts to $15 an hour. It was your “less than 1 billion” which is imprecise.

It was your number. Do you wish to retract your claims that it is “less than one billion” and that $5 for 20 minutes is a good figure? Or can you just deal with the fact that I didn’t use smoke and mirrors and you’re just. plain. wrong?

I understand your fear of imprecision. It leads you to say really dumb things. You offer a change over an order of a magnitude different than the number claimed as an aggregate, then offer a number which is far less than an order of magnitude away from the claimed aggregate, and you’re going to nitpick that 3.13 isn’t exactly a factor of 3? Well that’s really a bunch of crap.

120

As a member of the opposition, I’d characterize my ‘anti-TSA’ position as ‘TSA is overboard and a misallocation of resources.’ I don’t doubt the efficacy of all searches, but I think that TSA has traveled well past the point of diminishing returns.

Yes. In general there are two types of terrorist threat. The ‘lone-wolf’ and ‘professional’ organizations. Lone wolf operations are difficult to detect, but are limited in scope to what they accomplish (although there are horrifying examples of their success, e.g. McVeigh and Breivik). Professional organizations involve more moving parts and are vulnerable to detection and disruption prior to an attack.

I’m not as sanguine that an effective cost-benefit analysis has been done. How in the world are mm scanners cost effective? How in the world are random enhanced patdowns cost effective?

The TSA has given the impression of being reactionary, driven by publicized hysteria, and constantly playing a game of catch up. Two very difficult to conduct (and bungled) attacks: the shoe-bomber and the underwear bomber have resulted in new screening practices with high costs - mm scan and the ridiculous take off your shoes routine. This is the age old problem of gearing up to fight the last war.

There’s been some discussion of security protocols in this thread. One important aspect in an analysis of vulnerabilities is the cost to fix said vulnerability and the cost of having that vulnerability exploited.

I agree with you that effective policy decisions include placing a cost on human life. The prime danger of passenger aircraft attacks was the low yield cruise missile concept. It was terribly exploited once (or thrice depending on how you count). Two low cost solutions: locked cockpit and a wary passenger population have taken this option off the table.

The only remaining viable attack is destruction of the aircraft - threatening 300 or fewer people. So, passenger screening is now protecting against the same smaller threat is has been aimed at since the 70s. Not only that, passenger introduction of an explosive is a much less vulnerable avenue than placing an explosive in the cargo area (Lockerbie).

Based on the success of pre-2001 security at preventing aircraft bombings, why have we invested so much more money on passenger screening? The potential lives saved in the comparison of TSA vs. previous security is paltry - dwarfed by other actions we could take such as reducing the freeway speed limit by 5 mph. I don’t think its worth it to reduce the speed limit (for free), and I don’t think its worth it to employ TSA style passenger screening.