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Evaluating the effect of air transport resident subsidies on non-residents tourists’ expenditure

Author

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  • Jiménez, Juan Luis
  • Valido, Jorge
  • Pellicer, Alfonso Antonio

Abstract

Several countries around the world have implemented policies to subsidize passengers who live on islands and travel domestically by air transport. This paper analyzes the effect of an exogenous change in the percentage of air transport resident subsidies in Spain on non-residents tourists' expenditure per day and overnight stays in corresponding regions. Drawing on monthly data from the period 2015–2019, a difference-in-difference estimator is applied, in addition to several robustness checks and placebo tests. We found a negative causal relationship between raising the subsidy percentage and non-residents tourists' expenditure per day on affected routes (routes between the mainland and islands). In fact, estimations show a reduction of between 9.6 and 12.2 per cent of non-residents tourists’ expenditure per day on the Canary Islands.

Suggested Citation

  • Jiménez, Juan Luis & Valido, Jorge & Pellicer, Alfonso Antonio, 2023. "Evaluating the effect of air transport resident subsidies on non-residents tourists’ expenditure," Journal of Air Transport Management, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:jaitra:v:106:y:2023:i:c:s0969699722001387
    DOI: 10.1016/j.jairtraman.2022.102319
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    References listed on IDEAS

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    More about this item

    Keywords

    Subsidies; Resident passengers; Tourists' expenditure;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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