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A welfare analysis of subsidies for airports

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  • Miller, Benjamin I.
  • Dewey, James F.
  • Denslow, David
  • Miller, Edward B.

Abstract

The welfare of residents and profitability of business in many medium-sized MSAs would be improved if their airports had a higher level of service, for example reflected by more frequent flights serving more destinations. The level of service at such airports may rise with the number of enplanements, making total enplanements and the level of service subject to a positive feedback effect. Using a new annual data set put together by combining five sources for the years 2002 through 2012, we find evidence for such a positive feedback effect. We argue that subsidies at smaller airports may be welfare-enhancing in the presence of such an effect.

Suggested Citation

  • Miller, Benjamin I. & Dewey, James F. & Denslow, David & Miller, Edward B., 2016. "A welfare analysis of subsidies for airports," Journal of Air Transport Management, Elsevier, vol. 50(C), pages 83-90.
    • Handle: RePEc:eee:jaitra:v:50:y:2016:i:c:p:83-90
    DOI: 10.1016/j.jairtraman.2015.10.006
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    References listed on IDEAS

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    Cited by:

    1. Wu, Hanjun & Hong Tsui, Kan Wai & Ngo, Thanh & Lin, Yi-Hsin, 2020. "Impacts of aviation subsidies on regional wellbeing: Systematic review, meta-analysis and future research directions," Transport Policy, Elsevier, vol. 99(C), pages 215-239.
    2. Hanson, Daniel & Toru Delibasi, Tuba & Gatti, Matteo & Cohen, Shamai, 2022. "How do changes in economic activity affect air passenger traffic? The use of state-dependent income elasticities to improve aviation forecasts," Journal of Air Transport Management, Elsevier, vol. 98(C).
    3. Thomas, Nivea & Jha, Kumar Neeraj, 2024. "Econometric evidence on the profits and revenues of Indian regional airports," Journal of Air Transport Management, Elsevier, vol. 115(C).

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