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Airports 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 contribution of air services toward this outcome. This paper exploits the unexpected market changes induced by the 1978 Airline Deregulation Act to bring new evidence on the link between airline traffic and local economic growth. Using data for almost 300 Metropolitan Statistical Areas (MSAs) over a two decade time period centered around the policy change, we exploit time variation in long-run growth rates to identify the effects of airline traffic on population, income and employment growth. Our results suggest that air service has a significant positive effect on regional growth, with the magnitude of the effects differing by MSA size and industrial specialization.

Suggested Citation

  • Blonigen, Bruce A. & Cristea, Anca D., 2012. "Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment," MPRA Paper 40304, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:40304
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    2. Arnarson, Björn Thor, 2015. "Bridging Trade Barriers: Evaluating Models of Multi-Product Exporters," Working Papers 2015:6, Lund University, Department of Economics, revised 14 Oct 2016.
    3. Nicholas Sheard, 2015. "Airport Improvements and Urban Growth," ERSA conference papers ersa15p28, European Regional Science Association.
    4. Michael, Bryane, 2013. "Who Is Your Company? Where to Locate to Compete in Emerging Markets," EconStor Preprints 108998, ZBW - Leibniz Information Centre for Economics.
    5. Stela Todorova, 2018. "Air Transport and Economic Growth of the Regions: Cointegration and Analysis of Causation in Bulgaria," Regional Economy and Sustainable Development, Conference Proceedings 2017, Research Institute, University of Economics - Varna, issue 1, pages 215-224, March.
    6. Nicholas Sheard, 2015. "Airport Improvements and Urban Growth," AMSE Working Papers 1509, Aix-Marseille School of Economics, France.
    7. Philipp Breidenbach, 2015. "Expansions of Regional Airports and their Effect on the Local Economy," ERSA conference papers ersa15p1196, European Regional Science Association.
    8. Francesco David & Giuseppe Saporito, 2017. "The impact of a new airport on international tourism: the case of Ragusa (Sicily)," Questioni di Economia e Finanza (Occasional Papers) 412, Bank of Italy, Economic Research and International Relations Area.
    9. Richard Kneller & Danny McGowan, 2019. "The effect of airports on the growth of service exports," Discussion Papers 2019-10, University of Nottingham, GEP.
    10. Yan, Jia & Oum, Tae Hoon, 2014. "The effect of government corruption on the efficiency of US commercial airports," Journal of Urban Economics, Elsevier, vol. 80(C), pages 119-132.
    11. Sheard, Nicholas, 2014. "Airports and urban sectoral employment," Journal of Urban Economics, Elsevier, vol. 80(C), pages 133-152.
    12. Volodymyr Bilotkach, 2015. "Are airports engines of economic development? A dynamic panel data approach," Urban Studies, Urban Studies Journal Limited, vol. 52(9), pages 1577-1593, July.
    13. Markham, Francis & Young, Martin & Reis, Arianne & Higham, James, 2018. "Does carbon pricing reduce air travel? Evidence from the Australian ‘Clean Energy Future’ policy, July 2012 to June 2014," Journal of Transport Geography, Elsevier, vol. 70(C), pages 206-214.
    14. Kamruzzaman, Md. & Shatu, Farjana & Habib, Khandker Nurul, 2020. "Travel behaviour in Brisbane: Trends, saturation, patterns and changes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 140(C), pages 231-250.
    15. Xavier Fageda & Marta Gonzalez-Aregall, 2014. "“The Spatial effects of transportation on industrial employment ”," IREA Working Papers 201429, University of Barcelona, Research Institute of Applied Economics, revised Nov 2014.
    16. Baker, Douglas & Merkert, Rico & Kamruzzaman, Md., 2015. "Regional aviation and economic growth: cointegration and causality analysis in Australia," Journal of Transport Geography, Elsevier, vol. 43(C), pages 140-150.
    17. Yang Bai & Cheng-Lung Wu, 2022. "The Causality Analysis of Airports and Regional Economy: Empirical Evidence from Jiangsu Province in China," Sustainability, MDPI, vol. 14(7), pages 1-11, April.

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    More about this item

    Keywords

    airline traffic; urban growth; regional development; Airline Deregulation Act; air transport;
    All these keywords.

    JEL classification:

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

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