Nerds, take comfort. Experts say that the “time value” of flying is still higher than it is for driving — suggesting that airfares aren’t too outrageously high.
Many Americans are complaining about the price of airfares today. But if one looks at U.S. government data on the consumer prices paid by urban consumers for U.S. flights, airfares are only slightly higher than the average between 2010 and 2014 on a seasonally adjusted basis. (See the chart of data collected by the St. Louis Federal Reserve, here.)
What’s more, economists like to compare the cost of a product or service with its alternative substitute as a way of measuring price fairness.
In the case of flying, driving by car is the most common second-best option. Jennifer Saba at Reuters Breakingviews ran some numbers for a sample trip to see how pricing compared:
“A round-trip ticket from New York LaGuardia Airport to Charleston, South Carolina, for instance, cost nearly $300 for one passenger, according to the cheapest fares searched on Kayak. Throw in a reasonable estimate for parking or an Uber to the airport, and the all-in transportation cost adds up to around $435. Meantime at $4.84 per gallon, a driver would have to shell out about $230 to make the 1,500-mile round trip from the Big Apple to the Holy City and back in a Honda CRV.”
“But on a quick holiday weekend, there’s some value that a traveler ascribes to time. Assuming it takes about 11 hours to get to and from Charleston by plane, including the parking, security, boarding and unboarding process, a person pays about $40 an hour. That’s five times more than someone pays on the 28-hour round trip drive from New York to Charleston.”
In other words, if one measures the value of one’s time as it relates to the cost of a trip, flying still retains its value. Unless your flight is endlessly delayed. By Saba’s math: “If a flight is delayed for five hours, for example, air travel is only about 3 times more valuable than driving.” (.You’ll find Saba’s article on Reuters, here.)
So whether you’re flying or taking a road trip this year, don’t think only about “airmaggedon.” Also take comfort in the time you’re still saving by getting to your destination via the air, even if there are some delays. And take comfort from Skift’s analysis of why flying is so chaotic this summer.