The impact on the US economy of changes in wait times at ports of entry

Abstract

Inspections of people and vehicles at US border crossings are vital to homeland security and preventing unauthorized movement of people and freight into the US interior. However, these inspections incur various costs, including imposing delays on legitimate traffic and increasing expenditures to operate the crossings. In this study, we quantify the economic impacts of delays related to movement of passenger and commercial vehicles across 17 major land border crossings and international air travelers at 4 major US airports. We estimate the value of time spent in these delays, and how this changes if one inspection officer is added to each crossing׳s staff. We quantify how the transportation cost for shipping goods by truck into the US changes if wait time falls, and use the GTAP CGE model to estimate the change in macroeconomic activity in the US, Canada, and Mexico caused by the decrease in transportation cost. We also determine how many new cross-border passenger-vehicle trips result from a fall in wait time, and quantify the increase in economic activity in the US and its border regions associated with these new trips. Our results indicate that changes in US Customs and Border Protection (CBP) staffing would have significantly positive impacts on US GDP, trade balances, and employment, and would also significantly reduce the opportunity cost of waiting by passengers and truck drivers. These results should prove useful to those making decisions on border inspection resources, analysts researching trade facilitation issues, and the general public and its representative organizations who incur the costs but also the benefits of inspections.