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Air service and urban growth: Evidence from a quasi-natural policy experiment

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  • Blonigen, Bruce A.
  • Cristea, Anca D.

Abstract

While significant work has been done to examine the determinants of regional development, there is little evidence on the role of air services. This paper exploits the large and swift changes to air traffic induced by the 1978 Airline Deregulation Act to identify the link between air traffic and local economic growth. Using data for 263 Metropolitan Statistical Areas (MSAs) over a two-decade time period, we estimate the effects of airline traffic on local population, income, and employment growth. Our most conservative estimates suggest that a 50-percent increase in an average city’s air traffic growth rate generates an additional stream of income over a 20-year period equal to 7.4 percent of real GDP, the equivalent of $523.3 million in 1978 dollars.

Suggested Citation

  • Blonigen, Bruce A. & Cristea, Anca D., 2015. "Air service and urban growth: Evidence from a quasi-natural policy experiment," Journal of Urban Economics, Elsevier, vol. 86(C), pages 128-146.
    • Handle: RePEc:eee:juecon:v:86:y:2015:i:c:p:128-146
    DOI: 10.1016/j.jue.2015.02.001
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    More about this item

    Keywords

    Air transport; Passenger aviation; Urban growth; Regional development; Airline Deregulation Act;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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