Evaluating the long-run impacts of the 9/11 terrorist attacks on US domestic airline travel
AbstractAlthough the US airline industry began 2001 with 24 consecutive profitable quarters, including net profits in 2000 totaling $7.9 billion, the impact of the 9/11 event on the industry was substantial. Whereas the recession that began in early 2001 signaled the end of profitability, the 9/11 terrorist attacks pushed the industry into financial crisis after air travel dropped 20% over the September-December 2001 period compared to the same period in 2000. Given the decline in domestic air travel, an important question is whether the detrimental impact of the attacks was temporary or permanent. That is, did airline travel return to the trend that existed prior to the terrorist attacks? There are theoretical reasons to the believe that it would not. Economists have long viewed travel-mode choices as the outcome of a comparison of opportunity costs and benefits. Thus, anything that permanently raises the opportunity cost of travel, holding benefits constant, should reduce the level of travel volume. To determine whether air travel was permanently reduced, we use econometric and time-series forecasting models to generate a counter-factual forecast of air travel volume in the absence of the terrorist attacks. These dynamic forecasts are compared to actual air travel levels to determine the impact of the terrorist attacks. The findings suggest that domestic air travel did not return to the levels that would have existed in the absence of the attack.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 38 (2006)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Charles, Amelie & Darne, Olivier, 2006. "Large shocks and the September 11th terrorist attacks on international stock markets," Economic Modelling, Elsevier, vol. 23(4), pages 683-698, July.
- Cohen, Maurie J., 2010. "Destination unknown: Pursuing sustainable mobility in the face of rival societal aspirations," Research Policy, Elsevier, vol. 39(4), pages 459-470, May.
- Fildes, Robert & Wei, Yingqi & Ismail, Suzilah, 2011. "Evaluating the forecasting performance of econometric models of air passenger traffic flows using multiple error measures," International Journal of Forecasting, Elsevier, vol. 27(3), pages 902-922, July.
- Pitfield, D.E., 2008. "The Southwest effect: A time-series analysis on passengers carried by selected routes and a market share comparison," Journal of Air Transport Management, Elsevier, vol. 14(3), pages 113-122.
- Helena Chuliá Soler & Pilar Soriano Felipe & Francisco Climent & Hipòlit Torró, 2007.
"Volatility Transmission Patterns And Terrorist Attacks,"
Working Papers. Serie EC
2007-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Helena Chulia & Francisco Climent & Pilar Soriano & Hipolit Torro, 2009. "Volatility transmission patterns and terrorist attacks," Quantitative Finance, Taylor & Francis Journals, vol. 9(5), pages 607-619.
- Pitfield, D.E., 2008. "Some insights into competition between low-cost airlines," Research in Transportation Economics, Elsevier, vol. 24(1), pages 5-14.
- Chi, Junwook & Baek, Jungho, 2013. "Dynamic relationship between air transport demand and economic growth in the United States: A new look," Transport Policy, Elsevier, vol. 29(C), pages 257-260.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.