Operating costs for Air Force aircraft are about twice as large as acquisition costs and are thought to depend on age. When researchers have examined the question using data from the 1990s, they have found little or no association (none to 3 percent per year) between airplanes’ age and operating costs, but when they have used data from the 2000s with similar methods, they have found a significant association between the two (3 percent to 8 percent per year).
A current study by CBO reconciles that discrepancy by using the size of the Air Force’s budget as an additional explanatory variable. Estimates that do not account for the Air Force’s budget, according to the study, show that an additional year of age is associated with costs mostly in the range of 3 percent to 6 percent. Estimates that do account for the Air Force’s budget find associations mostly in the 2 to 4 percent range.
Presentation by Derek Trunkey, an analyst with CBO’s National Security Division, at the 93rd Annual Conference of the Western Economic Association International.