Equinomics, bag fees, and leftover campaign dollars

What It Covers

Three listener questions answered by NPR's The Indicator team: why airline baggage fees keep rising, why U.S. horse breeding has declined since 1986, and where campaign dollars actually flow during election cycles.

Key Questions Answered

• •Baggage Fee Strategy: Airlines deliberately set baggage fees at a level where convenience outweighs consumer resistance. Fees are taxed at lower rates than ticket prices, making that revenue more profitable per dollar. Travelers primarily compare ticket prices, not bag fees, so airlines face minimal competitive pressure to reduce them.
• •Horse Breeding as Economic Signal: U.S. thoroughbred foal numbers peaked in 1986 and have declined steadily, accelerating during the 2008 recession, COVID, and recent inflation. Horses function as luxury goods economically, meaning breeding activity contracts when disposable income shrinks, making it a lagging reflection of economic stress rather than a predictive recession indicator.
• •Campaign Spending Breakdown: Advertising consumes the largest share of campaign budgets, but significant funds also go toward door-knocking, rallies, polling, data firms, and fundraising operations themselves. Political consultants, ad makers, and media companies capture substantial portions of this spending across every election cycle.
• •Local Economic Impact of Elections: Campaigns inject money into local economies by hiring community organizers, buying local media ad space, and funding ground operations. However, this represents redirected consumer spending rather than new economic activity — donors forgo other purchases, shifting who benefits rather than expanding total economic output.