ABSTRACT
The benefits of safety are undeniable—not only from a moral standpoint, but also from an economic standpoint. Some of the potential economic benefits of aviation safety include: strengthened consumer demand, strengthened labor supply, reduced insurance costs, lower cost of capital, lower liability risk, and reduced costs associated with government fines or penalties. A fatal aviation accident is one which produces fatalities, or deaths. Typically, aviation safety is measured in terms of accidents, fatal accidents, fatalities, and hull losses. Once a highly risky method of transportation, aviation has developed into the safest mode of transportation available to the public. The evolution of the jet engine through the 1960s resulted in an accident rate that was decreasing exponentially, signaling a dramatic change in aviation safety. To understand the economics of aviation safety, one needs to look at the industry from the macro-level, where the benefits of safety regulations to consumers and companies are weighed against the costs of imposing the regulations.
