Child Safety Seats on Commercial Airliners: A Demonstration of Cross-Price Elasticities
Economic Instruction
In this section, the Journal of Economic Education publishes articles, notes, and communications describing innovations in pedagogy, hardware, materials, and methods for treating traditional subject matter. Issues involving the way economics is taught are emphasized. PAUL GRIMES, Section Editor
Child Safety Seats on Commercial Airliners: A Demonstration of Cross-Price Elasticities
Shane Sanders, Dennis L. Weisman, and Dong Li
Abstract: The cross-price elasticity concept can be difficult for microeconomics students to grasp. The authors provide a real-life application of cross-price elasticities in policymaking. After a debate that spanned more than a decade and included input from safety engineers, medical personnel, politicians, and economists, the Federal Aviation Administration (FAA) recently announced that it would not mandate the use of child safety seats on commercial airliners. The FAA’s analysis revealed that if families were forced to purchase additional airline tickets, they might opt to drive rather than fly, and driving represents a far more dangerous mode of travel. Given the relatively high cross-price elasticity between automobile travel and air travel, the FAA concluded that the mandatory child safety seat policy failed to pass the cost-benefit test—the policy would lead to a net increase in the number of fatalities. The authors review the FAA’s decision-making process and highlight the role of economic analysis in developing public policy. Keywords: cost-benefit analysis, cross-price elasticities, public policy JEL codes: A20, A22
Shane Sanders is an assistant professor of economics at Nicholls State University (ssander9@ aum.edu), Dennis L. Weisman is a professor of economics at Kansas State University, and Dong Li is an associate professor of economics at Kansas State University. The authors are grateful to William Becker, Michael Watts, Nancy Claussen, Jason Coleman, Thomas Sowell, Bhavneet Walia, staff members at the
In this section, the Journal of Economic Education publishes articles, notes, and communications describing innovations in pedagogy, hardware, materials, and methods for treating traditional subject matter. Issues involving the way economics is taught are emphasized. PAUL GRIMES, Section Editor
Child Safety Seats on Commercial Airliners: A Demonstration of Cross-Price Elasticities
Shane Sanders, Dennis L. Weisman, and Dong Li
Abstract: The cross-price elasticity concept can be difficult for microeconomics students to grasp. The authors provide a real-life application of cross-price elasticities in policymaking. After a debate that spanned more than a decade and included input from safety engineers, medical personnel, politicians, and economists, the Federal Aviation Administration (FAA) recently announced that it would not mandate the use of child safety seats on commercial airliners. The FAA’s analysis revealed that if families were forced to purchase additional airline tickets, they might opt to drive rather than fly, and driving represents a far more dangerous mode of travel. Given the relatively high cross-price elasticity between automobile travel and air travel, the FAA concluded that the mandatory child safety seat policy failed to pass the cost-benefit test—the policy would lead to a net increase in the number of fatalities. The authors review the FAA’s decision-making process and highlight the role of economic analysis in developing public policy. Keywords: cost-benefit analysis, cross-price elasticities, public policy JEL codes: A20, A22
Shane Sanders is an assistant professor of economics at Nicholls State University (ssander9@ aum.edu), Dennis L. Weisman is a professor of economics at Kansas State University, and Dong Li is an associate professor of economics at Kansas State University. The authors are grateful to William Becker, Michael Watts, Nancy Claussen, Jason Coleman, Thomas Sowell, Bhavneet Walia, staff members at the