A Hidden Cost Due to Climate Change
Over the last decade some leading economists have written about the benefits and costs of airlines using hubs. Here is one paper . I have wondered how climate volatility will affect the time cost of air travel in a world of hub flights. If I must fly from Boston through Chicago to get to my final destination, the introduction of the second leg of the trip increases the likelihood that something can go wrong as the plane that is supposed to take me on the 2nd leg flies in from somewhere else. Given that time is a our scarcest asset and that our value of time rises as we grow richer, any increases in travel time in minutes can add up to a large total social cost in an economy that is constantly using the airport. At one point, I wanted to write a paper on this topic but I couldn’t figure out how to quantify this effect. From the airlines’ perspective, how costly would it be for them to have more parked airplanes and some duplication of their system as an insurance policy against late arriving flights due to weather delays?