Stan, You Need a Copy of the Pocket Goolsbee

Mon, 09 Jun 2008 12:30:36 +0000

Stan, so sorry for your travel woes. It is tempting to describe your flight delays as a tragedy of the commons, but Austan Goolsbee set the record straight on this one three years ago with this great column, "Tragedy of the Airport," in Slate. Here is the key excerpt:

At first glance, this seems crazy. The common explanation given for flight delays is that too many people are flying: The more air traffic, the more delays. That's what most economists say, too. This view of airport congestion makes it seem just like highway congestion. Each time an airline schedules a flight, it doesn't take into account the backups it causes by crowding the airspace. The dynamic generates a tragedy of the commons, in which each of the companies vying for runway slots has an incentive to overschedule.

The problem with this explanation is that it doesn't hold up. Take airports like Atlanta, Washington-Dulles, and Newark, which are dominated by a single carrier. If the tragedy of the commons theory bore out, then these airports would be less tardy, because a dominant carrier has an incentive to take into account the delays that it causes by crowding the runways. That's why the solution that economists always offer for the tragedy of the commons is to give one entity an exclusive property right. Yet Atlanta, Dulles, and Newark are among the top 10 tardiest airports in the country. In a study of more than 65 million flights over 12 years, economists Christopher Mayer at Columbia Business School and Todd Sinai at Wharton business school recently found only a small correlation between the dominance of a single carrier at an airport and the length of flight delays.

Mayer and Sinai's study also identified the real culprit: the deliberate overscheduling of flights at peak periods by major airlines trying to increase the amount of connecting traffic at their hub airports. Major airlines like United, Delta, and American use a hub-and-spoke model as a way to offer consumers more flight choices and to save money by centralizing operations. Most of the traffic they send through a hub is on the way to somewhere else. (Low-cost carriers, on the other hand, typically carry passengers from one point to another without offering many connections.) Overscheduling at the hubs can't explain all delays—weather and maintenance problems also contribute. But nationally, about 75 percent of flights go in or out of hub airports, making overscheduling the most important factor.

So the direct answer to your question, Stan, is that the reductions in the number of scheduled flights will alleviate the problems you experienced primarily if they reduce scheduling at the peak times. It's not clear from the news reports whether that will happen.

Read all of Goolsbee's column for some strategies to avoid being overscheduled. The paper by Mayer and Sinai that is referenced in the column is this one: "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Created Evil." The American Economic Review, Vol. 93(4), 1194-1215.