ESSA

ESSA

The right of recline


Amy Pereira

By

May 24th, 2017


Who should get control of the scare resource that is legroom? Amy Pereira investigates.


There are few mile- high issues as divisive as the reclining seat. Passive aggression, verbal confrontation and all out brawls have ensued over the question of who owns the inches of space into which the passenger in front can recline his seat. Such battles have caused everything from mere disturbance, to unscheduled landings.

 

Passengers who suddenly find their faces within inches of the seat in front have been known to wedge their knees into the back of the seat, ensuring that the recliner pays for what they’ve done. Some passengers have gone as far as to attach The Knee Defender to the chair in front, to prevent it from being able to recline. Needless to say, this clever device is now banned on most airlines.[1]

 

In the absence of plane etiquette, perhaps the issue can be resolved by economics. Who controls a scarce resource when people are competing for it? Does it matter who owns the right in the first place?

 

Economist Ronald Coase would suggest not. In his theory, Coase argues that it doesn’t matter to whom the right is initially assigned. Whoever values the resource will simply purchase it from the other.[1]

 

Two economists from the US put Coasean theory to the test.[2]  They asked people to indicate how much they’d be willing to pay or accept not to recline. Recliners wanted an average of $41 to refrain from reclining, while reclinees were willing to pay $18 to stop recliner from reclining.[2] This finding supports the theory that legroom belongs to the person seated in front.

 

But what happens when instead of having the inherent right to recline, people had to negotiate for it? Recliners were willing to pay $12 while reclinees were unwilling to sell their legroom for less than $39.[2]  This flip of values doesn’t make sense in Coasean theorem, where the value of the legroom should remain the same no matter who owns it.

 

The answer? The endowment effect. The endowment effect suggests that it actually does matter who originally owns an asset- the value we put on something is quite a bit greater if we stand to lose it than we if have to bargain for it in the first place. The endowment effect has been observed for all sorts of resources – paintings, basketball tickets and hunting permits included.[3]

 

The endowment effect stems from the fact that people don’t like to lose things that they have. This explains why people were more less willing to give up their right to recline, than they were to purchase the right if they weren’t given it as a default.

 

The reason why we don’t currently bargain on planes could be due to one of two issues. Either the transaction costs are too high, or the legroom is already efficiently allocated. Given the arguments over legroom, the former is the most likely reason.[2] Perhaps the difficulty and awkwardness of negotiating with strangers that you have to spend the next 12 hours in tight confines with means that people don’t bother to bargain.

 

But if we did bargain, we may be better off. Legroom would be efficiently allocated, and one the source of conflict is eliminated… unless of course, the negotiations get out of control. The easiest fix? Remove reclining seats all together. Problem solved.

 

References

[1] B.R. (2017, May 15) Recline and fall. Who owns the space between reclining airline seats? The Economist. Retrieved from http://www.economist.com/blogs/gulliver/2017/05/recline-and-fall

 

[2] Buccafuso, C., & Springman, C.J. (2017) Who Deserves Those 4 Inches of Airplane Seat Space? Slate. Retrieved from http://www.slate.com/articles/health_and_science/science/2014/09/airplane_seat_reclining_can_economics_reveal_who_deserves_the_space.html

 

[3] Kahneman, D., Knetsch, J.L., & Thaler, R.H. (1991) Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias, The Journal of Economic Perspectives, 5(1), 193-206.

 

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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