jamesz

Fat taxes revisited

/17 Comments/in /by

Matt’s previously advocated a fat tax, but really he was talking about a tax on unhealthy food. Now United Airlines has decided to tax people for just being big: if you’re too big to fit in one seat then you’ll have to buy two. There are two reasons why they get large people to pay more:

  • Large people cost more in fuel to fly.
  • Large people bother other passengers by encroaching on their space.

I’m totally fine with people paying their way, but this seems a bit extreme. I have to side with William Saletan at Slate here in suggesting that they could have gone about their pricing scheme a little better. Basically, they’re missing out on revenue from all those people who are too big for one seat but unwilling to pay for two. They’re also likely to enrage a lot of people through their stance.

Why could they not introduce a section with wider seats that cost more to alleviate the second problem? Or charge a premium to heavier people to solve the second problem? Of course I don’t know about all the practical details of airline pricing, but it seems like they could have made more money and less fuss by going about it in a slightly less extreme fashion.

  • On the wider seats issue they would have to reconfigure their planes which I imagine would be quite expensive?

    You might also struggle to fill those wider seats when there aren’t a bunch of fat people wanting to get on the flight.

    I think this policy is extreme, but I’m not sure the alternatives are practical. Do we have scales outside each plane to get weighed and then pay a weight based surcharge before we get on? I would definitely start dieting prior to any travel, lol

    likewise do we have a per inch price for seat encroachment? We would have to measure up the encroachers and encroachees to work out how much compensation is required.

    I’m guessing airlines don’t go for such granular pricing because the benefits are outweighed by the increased transaction costs

  • @agnitio
    The reconfiguration may be an issue. I just don’t know.

    The filling of the seats, possibly. But I’m sure there are people who’d pay for the bigger ones who aren’t fat.

    Scales, yes we have them for luggage so that’s not hard to implement. Per inch prices can be estimated, I’m sure.

    Perhaps you’re right, but I still struggle to see this as an optimal strategy.

  • In a world of no transaction costs I’m sure it would be quite suboptimal:)

    hehe, that would be funny if you wighed your suitcase and then had to hop on yourself:)

    Weighing people would have to be monitored so you don’t get your wife to stand on the scales for you. Plus it would take longer to check in.

    Bags are weighed at the moment but only to check that they don’t exceed a certain weight (above which you pay). So right now they could charge you for your baggage on a per kg basis, but presumeably they don’t because it would be a pain in the ass (for customers and the airlines) to put a transaction through for every single passenger. Transaction costs lead to averaging.

    Implementing these types measures seems to push against the current trend of trying to streamline the check in process as much as possible.

  • FreneticMonkey

    “Why could they not introduce a section with wider seats that cost more to alleviate the second problem?”

    if you want a larger seat you can already pay more for business or first class

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  • Mike@pvl

    yeah, when this story broke a few days ago here there were a lot of people calling into CNN saying “make the seats wider”. except that would mean less seats per plane. lower supply of seats + assume similar demand = higher price per seat. except now for everyone. so my skinny butt has to subsidize someone else’s?

    nope, i’m sorry, but no, hop on a treadmill and have a salad. i mean look, i have to pay more if i pack an extra bag. but someone can carry that bag’s worth of weight onto the plane in their left cheek and pay no extra?

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  • Grant

    I agree with FreneticMon, airlines already do this with various classes of seat. If they want to force people to sit in these seats they need to introduce, for health and safety reasons, size and weight limits for seats. To me, this raises 2 immediate issues firstly, how to ensure that people report the right body size when buying tickets and secondly, how will the “normal” size passenger who buys a premium class ticket react to being grouped with the obviously horrible fat people?

  • Regarding business class and first class, they exist to price discriminate between consumers with different elasticities of demand. Unless overweight people have a lower elasticity of demand for luxury air travel than slender people, I don’t think lumping the overweight with the wealthy is an optimal strategy.

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  • I’ve always liked the idea that each passenger has, say 100kg of weight included in the price of the ticket. You can use this however you wish. If you are 80kg then you have 20kg left for luggage weight before you start paying for the extra fuel that the aircraft must use for example.

  • ben

    @Eric Olthwaite

    Well there’s a way to annoy all your larger customers and the friends and family of them. Good luck competing with that business model.

  • I would be surprised if many airlines found the transactions costs of running the scheme were lower than the aggregate increase in willingness to pay from folks like me who’d be willing to pay for a guarantee that my seat will be free from encroachment by the obese.

    Prior to becoming kidded, I’d also have paid more for a flight guaranteed free of babies. Just not enough more to induce any airline to offer such a service.

    Of course, I’m appalled by measures banning airlines from experimenting with these kinds of policies. It’s funny how the same sorts of folks who want to ruin our lives with fat taxes on food scream with horror at the thought of airlines applying the same policy but more efficiently: charging for the result rather than for an input weakly correlated with the result.

  • ben

    I withdraw my earlier comment disparaging Eric O’s idea. Fact is, airline price is so fantastically complex in a competitive industry that I have absolutely no idea what is or is not a good pricing policy. Maybe Eric O’s idea would be a winner if tried.

    Re: Eric C:

    Of course, I’m appalled by measures banning airlines from experimenting with these kinds of policies. It’s funny how the same sorts of folks who want to ruin our lives with fat taxes on food scream with horror at the thought of airlines applying the same policy but more efficiently: charging for the result rather than for an input weakly correlated with the result.

    Agreed re: appalled. And an interesting observation: its ok, apparently, to encourage good eating habits or force them outright, but to levy taxes based on outcomes based on those past behaviours is somehow unethical. I (genuinely) don’t understand the merit of this view, either on efficiency or ethical grounds. Perhaps someone can explain.

    This is almost the opposite of M Friedman’s advice, which was to judge a policy by its effects and not its intent. That, too, is a trap of politicians, and in particular I suspect, of the Left.