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Airport Size and Urban Growth

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  • Nicholas Sheard

Abstract

This paper studies how airports affect economic growth in US metropolitan areas. The main finding is that airport size has a positive effect on local employment, with an elasticity of 0.04. The effect appears to be mostly due to a positive effect on services employment and to be concentrated in parts of the metropolitan area nearer the airport. To further understand how an airport affects the local economy, the effects on several other variables are estimated. Airport size is found to have positive effects on the number of firms, the population size, the rate of employment, and GDP in the local area. The magnitudes of the effects on population and employment suggest that airport expansion creates jobs for both existing residents and migrants to the area. The estimation uses a novel technique to identify the effects of airport infrastructure. It applies instruments for changes in airport size that are calculated from overall changes in air traffic in a set of categories: the airlines, the types of aircraft, or the distances flown. The technique could be adapted to study the effects of other types of infrastructure.

Suggested Citation

  • Nicholas Sheard, 2019. "Airport Size and Urban Growth," Economica, London School of Economics and Political Science, vol. 86(342), pages 300-335, April.
    • Handle: RePEc:bla:econom:v:86:y:2019:i:342:p:300-335
    DOI: 10.1111/ecca.12262
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    References listed on IDEAS

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    15. Sheard, Nicholas, 2017. "Airport consolidation and the provision of air services," Journal of Air Transport Management, Elsevier, vol. 60(C), pages 31-44.
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    Cited by:

    1. Stephen Gibbons & Wenjie Wu, 2020. "Airports, access and local economic performance: evidence from China [Are Chinese cities too small?]," Journal of Economic Geography, Oxford University Press, vol. 20(4), pages 903-937.
    2. Pot, Felix Johan & Koster, Sierdjan, 2022. "Small airports: Runways to regional economic growth?," Journal of Transport Geography, Elsevier, vol. 98(C).
    3. Florian Mayneris, 2017. "Effets des infrastructures de transport sur le niveau et la localisation des activités économiques," LIDAM Discussion Papers IRES 2017023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Nicholas Sheard, 2021. "The network of US airports and its effects on employment," Journal of Regional Science, Wiley Blackwell, vol. 61(3), pages 623-648, June.
    5. Silke J. Forbes & Renáta Kosová, 2023. "Does Competition Benefit Complements? Evidence from Airlines and Hotels," Management Science, INFORMS, vol. 69(8), pages 4733-4752, August.
    6. Gibbons, Stephen & Wu, Wenjie, 2017. "Airports, market access and local economic performance: Evidence from China," LSE Research Online Documents on Economics 83630, London School of Economics and Political Science, LSE Library.
    7. Pi, Jianhua & Li, Dong & Liu, Xingjian & Freestone, Robert, 2021. "The spatial distribution of employment around major Chinese airports," Journal of Transport Geography, Elsevier, vol. 91(C).
    8. Hidalgo-Gallego, Soraya & Núñez-Sánchez, Ramón, 2023. "The effect of port activity on urban employment: An analysis for the Spanish functional urban areas," Journal of Transport Geography, Elsevier, vol. 108(C).
    9. Lázaro Florido-Benítez, 2023. "The Role of the Top 50 US Cargo Airports and 25 Air Cargo Airlines in the Logistics of E-Commerce Companies," Logistics, MDPI, vol. 7(1), pages 1-27, February.
    10. Kurt Sant, "undated". "An analysis of recent developments in Malta’s air connectivity," CBM Policy Papers PP/03/2020, Central Bank of Malta.
    11. McGraw, Marquise J., 2020. "The role of airports in city employment growth, 1950–2010," Journal of Urban Economics, Elsevier, vol. 116(C).
    12. Jesús Rodrigo-Comino & Barbara Ermini, 2021. "Are Cities Truly Dispersed? A Long-Term Analysis of Vertical Profile of Settlements in Athens’ Metropolitan Region," Sustainability, MDPI, vol. 13(6), pages 1-14, March.
    13. Lenaerts, Bert & Allroggen, Florian & Malina, Robert, 2021. "The economic impact of aviation: A review on the role of market access," Journal of Air Transport Management, Elsevier, vol. 91(C).
    14. Carbo, Jose M. & Graham, Daniel J., 2020. "Quantifying the impacts of air transportation on economic productivity: a quasi-experimental causal analysis," Economics of Transportation, Elsevier, vol. 24(C).
    15. Jun Zhou & Liang Leng & Xiaofa Shi, 2022. "The Impact of Air Cargo on Regional Economic Development: Evidence from Chinese Cities," Sustainability, MDPI, vol. 14(16), pages 1-16, August.
    16. Sobieralski, Joseph B., 2021. "Transportation infrastructure and employment: Are all investments created equal?," Research in Transportation Economics, Elsevier, vol. 88(C).
    17. Pouget, Lilian & Ribeiro, Nuno Antunes & Odoni, Amedeo R. & Antunes, António Pais, 2023. "How do airlines react to slot displacements? Evidence from a major airport," Journal of Air Transport Management, Elsevier, vol. 106(C).

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