Final answer:
Opportunity cost in business economics refers to the value of the next-best alternative when making a choice. In the context of airline security, the time passengers spend waiting due to enhanced security measures represents a substantial opportunity cost, which can amount to $8 billion annually. This cost includes not only the time lost but also potential earnings and productivity for travelers.
Step-by-step explanation:
Opportunity Cost of Airline Security
The concept of opportunity cost is crucial in understanding the impacts of increased airline security measures. After the 9/11 attacks, the intensified security procedures meant that each passenger began to spend, on average, an additional 30 minutes per trip at the airport. Using the United States Department of Transportation statistics, with 895.5 million passengers in 2015, and assuming the cost of time is $20 per hour, the total opportunity cost per year can be significant. This cost translates to an estimated $8 billion annually, highlighting that not all costs are monetary but can be measured in terms of time lost, which has substantial value, especially for business travelers.
As a comparison, direct equipment upgrades like three-dimensional baggage scanners and facial recognition software have their own hefty price tags—potentially $450 million and $2 billion, respectively. However, these are direct expenditures, whereas the cost of waiting is indirect and sometimes not as visible. Notably, the access to airport lounges through programs unrelated to specific airlines, which often have a membership fee, provides travelers an opportunity to make use of their time more efficiently while waiting at the airports.