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Impact of Subsidizing Air Routes in Russia on Passenger Traffic Dynamics

Author

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  • P. A. Lavrinenko

    (Institute of Economic Forecasting, Russian Academy of Sciences)

  • A. N. Bereznyatskiy

    (Central Economics and Mathematics Institute, Russian Academy of Sciences)

Abstract

— The paper considers the problem of evaluating the effectiveness of subsidies for air transport in Russia in terms of attracting additional passenger traffic. The study primarily focuses on regional air routes bypassing the city of Moscow. An extensive database on air routes in Russia, the amount of subsidies to air carriers, and regional macroeconomic indicators for 2012–2021 was used to estimate the effects. Statistical hypotheses are tested using panel data models and logistic regression. The results of the analysis show that there is a statistically significant effect of subsidizing air routes in Russia in terms of changes in passenger traffic. At the same time, the response to subsidies on various air routes is different. Several typical clusters have been identified among them, which differ in the degree of passenger traffic elasticity to subsidies. Based on the binary choice model, a “reverse” test was formulated to assess the statistical significance of subsidies, which also confirmed the drawn conclusions.

Suggested Citation

  • P. A. Lavrinenko & A. N. Bereznyatskiy, 2023. "Impact of Subsidizing Air Routes in Russia on Passenger Traffic Dynamics," Studies on Russian Economic Development, Springer, vol. 34(5), pages 627-639, October.
    • Handle: RePEc:spr:sorede:v:34:y:2023:i:5:d:10.1134_s1075700723050088
    DOI: 10.1134/S1075700723050088
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    References listed on IDEAS

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    1. Xavier Fageda & Ancor Suárez-Alemán & Tomás Serebrisky & Reinaldo Fioravanti, 2019. "Air transport connectivity of remote regions: the impacts of public policies," Regional Studies, Taylor & Francis Journals, vol. 53(8), pages 1161-1169, August.
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