Tuesday, July 31, 2007

Airspace a private good

The tragic story of the two news helicopters colliding in Arizona during a high-speed police chase demonstrates how airspace can be viewed economically as a private good. Air traffic control acts as a supplier of the good. The good is excludable because air traffic control must clear crafts to fly in the area. The air is rival in consumption because only one aircraft can occupy a particular unit of air at one time or tragedy will ensue as did in this story. What is considered a unit of air can change what category the good would be considered. If the unit of air is the entire airspace that air traffic control allowed the aircrafts to occupy, then more than one person could use that unit at the same time making the airspace an artificially scarce good.

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