There were, once again, some truly excellent comments on my last post, in which I offered my answers to the questions blockquoted below. Furthermore, Jeanne Hoffman at Heels First Travel--a lawyer by training and a member of the IHS staff--also picked it up and offered comments.
Crying babies and loud children are among the common complaints of frequent flyers; indeed, I can say from personal experience that a screaming infant can make for a long flight. Describe the reciprocal nature of the externality. How does the private market internalize the externality? To what extent does the possibility of an upgrade to first class help mitigate the externality? What is the role of reasonable expectations in deciding on a policy? What is the parent's responsibility? What is the responsibility of the other flyers?
Here is an attempt to show why the crying baby is indeed an externality. Suppose instead of a crying baby, the sound was from an accordion player. One of the passengers on the plane paid the person beside them $100 to play some accordion music during the flight. Everyone else on the plane has bleeding ears.
Is the accordion music [sic] an externality? I would think obviously so. So why not the infant?
There were several other great comments. Just because there appears to be a spillover doesn't mean the other passengers are entitled to relief. Perhaps I should have been more specific--perhaps I should've asked whether other passengers are entitled to relief because of kid-related noise. That said, here's how loud kids on planes are and aren't like dirty factories and onboard accordion players.
Consider the factory example first. To change the example to one I use in class, suppose Bart and Lisa go to the Ol' Fishin' Hole and catch a three-eyed fish. They look up and see Mr. Burns' nuclear power plant on the shores of the fishin' hole. Are they entitled to relief?
I think the answer depends on who was there first. If it was Mr. Burns, then he homesteaded the right to use the Fishin' Hole, Bart and Lisa "came to the nuisance," to use the lingo for these kinds of examples, and Bart and Lisa are not entitled to relief. If it was Bart and Lisa, then Mr. Burns has violated their established right to use the Fishin' Hole and Bart and Lisa are entitled to relief. Murray Rothbard's article "Law, Property Rights, and Air Pollution" is fantastic on these issues. In the case of Burns v. Bart & Lisa, the court's job would be to determine who has the right to the Fishin' Hole.
Now consider the accordion player. This is interesting because the airline owns the shared space within the plane and can therefore decide on its own policy. It's probably reasonable to expect a few kids on a plane and, therefore, a little bit of kid-related noise. Accordion-playing, on the other hand, is sufficiently out of the ordinary (and sufficiently disruptive) that most airlines will (politely) ask accordion-players to stow their instruments beneath the seat in front of them or in the overhead compartment.
If demand is sufficient, of course, there might be a market for accordion-friendly and accordion-free airlines--or at least accordion-playing and non-accordion-playing sections with soundproof glass between them. I'll let Carol Burnett, Harvey Korman, and Tim Conway explain further: