Free the Hangers
I typed this from 10,000 feet, while on my way to the annual econ gabfest known as the ASSA meetings. I was lucky enough to score an upgrade to first class, and as I settled into my seat I was informed about the most astonishing cost-cutting measure: U.S. Airways has taken the coat hangers out of its planes.
Arriving uncrumpled used to be one of the few perks for those at the front of the plane, but now the racks behind seat 4B sit unemployed. It can’t be that these hangers had much value on the secondary market, and the number of flight attendants hasn’t changed, so I can only guess that the cost reductions come from the fuel savings that come from carrying a few less ounces. (How big could these be?)
But U.S. Airways beware: If I were an aspiring entrepreneur, I would be rushing a collapsible travel hanger onto the market; and if this occurs, passengers will simply be adding that extra weight onto their carry-on bags, undoing the airline’s cost savings. And that’s the difference between the simple accounting of cost-cutting and the economic approach, which takes account of how behavior responds to incentives.
In fact, I had a hanger in the bottom of my bag, and so I arrived in San Francisco, recognizable as the least-crumpled economist.