Question

The federal government recently considered a proposal that all babies flying on domestic airliners be required to be seated in an infant seat occupying an airline seat. At present airlines allow infants to share a seat with a parent, by sitting on the parent’s lap, where they are more vulnerable to an aircraft crash than in an infant seat. Economists argued that the new law would result in more deaths of babies, not less.

Briefly outline how an economist might arrive at that conclusion.

First explain what happens in the transportation market by applying the federal government proposal.

What economic concepts and parameters would be relevant?

Answer 1

The reason an economist could arrive at the conclusion that having infant seats will lead to more deaths is because of the increase in cost that comes into picture. Firstly, if we see the transportation market, the biggest impact would be on the production cost. The cost would increase for the airline manufacturers as they will have to spend more to set up the infant seats. And now if we understand how infant seats would increase deaths, the economic concept that will become relevant is opportunity cost meaning that the cost of travelling by road reduces which might increase the number of deaths due to crashes on the highway. To conclude we could say that by passing a regulation that would require infants to be seated in the infant seats, the parents will have to purchase this seat. This increases their cost of travelling by plane and so many families would prefer to go by road as that has become relatively cheaper.