Making TSA’s PreCheck program free could save money for many people and save money for TSA, according to a study published by the University of Illinois at Champaign-Urbana. The authors concluded that if every traveler who signed up went through PreCheck at least six times a year, the cost savings would amount to $459 million annually from decreased staff and equipment costs—a net savings of $34 million per year. I developed somewhat similar study for Custom and Border Protection’s Global Entry Program in 2009.
In my study, I looked at CBP’s processing time breakeven point. The breakeven point is when the added resources for CBP to approve a member is equal to the number of instances, multiplied by the reduced labor resources expended between using a Global Entry kiosk versus a passport control line. My results showed that for a 5-year period, from a CBP perspective, a person would have to present himself/herself three times or more annually. From a private sector perspective, those individuals using Global Entry six times or more were better off enrolling in the program than waiting in the normal passport control line. I also showed that more than 75% of all individuals using Global Entry were admitted into the United States in less than 5 minutes. These unpublished results were presented at both the 2009 Eastern Economics Association Annual Meetings and the Transportation Research Board Annual Meetings in 2009.
The beauty of these kinds of analyses is that they can be used by policy makers, for example, to inform DHS management decisions. DHS frequently faces difficult budget decisions, and in this case, economics can facilitate making these decisions by suggesting that benefits and costs can be used to make efficient budget allocations. This should not be difficult for these two agencies because the presumption is that the security benefits of using TSA’s PreCheck is at least identical to processing people in a non-PreCheck lane. The same is true for using a Global Entry kiosk versus the alternative.
TSA and CBP budgets, like most budgets, are limited. This implies a need for
budget scrutiny. Economic efficiency criteria require that benefits and costs of alternative budget decisions be weighed. For these agencies, this may take many forms:
- Do the benefits of a specific initiative exceed the costs? (Cost-benefit analysis.)
- For a given set of priorities or directives, what is the least costly method of achieving them? (Cost-effectiveness analysis.)
- Given DHS’s mission, what is the best use of the budget?
Weighing the costs and benefits of alternative policies provides information about the efficiency of those decisions so scarce dollars can provide maximum benefits to our society. In a number of examples, fee levels have been determined by regulation, but there is no reason why regulations cannot be modified and made more flexible for all parties involved. The agencies should consider models showing efficiency criteria that can be used to determine fee levels and resource allocation levels for achieving desired security levels. I caution, however, that valuation methods are generally limited and examples like the benefits and costs associated with these successful security programs are rare examples.