The Impact of Post-9/11 Airport Security Measures on the Demand for Air Travel

We examine the impact of post-9/11 airport security measures on air travel in the U.S. Using five years of data on passenger volume, we evaluate the effects of the implementation of baggage screening and the federalization of passenger screening on the demand for air travel. These two congressionally mandated measures are the most visible changes in airport security following the 9/11 attacks. Exploiting the phased introduction of security measures across airports, we find that baggage screening reduced passenger volume by about six percent on all flights, and by about nine percent on flights departing from the nation’s fifty busiest airports. In contrast, federalizing passenger screening had little effect on passenger volume. We provide evidence that the reduction in demand was an unintended consequence of baggage screening and not the result of contemporaneous price changes, airport-specific shocks, schedule changes, or other factors. This decline in air travel had a substantial cost. “Back-of-theenvelope” calculations indicate that the airline industry lost about $1.1 billion, eleven percent of the loss attributed to 9/11 directly.