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The income elasticity of air travel: a meta-analysis

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  • Gallet, Craig A.
  • Doucouliagos, Hristos

Abstract

There is much disparity in estimates of the income elasticity of air travel across the literature. We examine this disparity by applying meta-regression techniques. Controlling for several issues, including publication selection bias, while our preferred baseline income elasticity estimate of 1.186 is consistent with air travel being a luxury and a slightly immature market, there are several features of the literature which sway the income elasticity away from this baseline. For instance, the income elasticity increases to 1.546 on international routes, yet decreases to 0.633 when air fare is included in a dynamic specification of demand, ceteris paribus. Other characteristics of the literature, such as those involving various data and estimation choices, have less influence on the reported income elasticity.
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  • Gallet, Craig A. & Doucouliagos, Hristos, 2014. "The income elasticity of air travel: a meta-analysis," Working Papers eco_2014_6, Deakin University, Department of Economics.
    • Handle: RePEc:dkn:econwp:eco_2014_6
    DOI: 10.1016/j.annals.2014.09.006
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    Cited by:

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    4. Helena Nemec Rudez, 2018. "The Relationship between Income and Tourism Demand: Old Findings and New Research," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 11(1), pages 67-73.
    5. Fouquet, Roger & O'Garra, Tanya, 2022. "In pursuit of progressive and effective climate policies: Comparing an air travel carbon tax and a frequent flyer levy," Energy Policy, Elsevier, vol. 171(C).
    6. Oladosu, Gbadebo A. & Leiby, Paul N. & Bowman, David C. & Uría-Martínez, Rocio & Johnson, Megan M., 2018. "Impacts of oil price shocks on the United States economy: A meta-analysis of the oil price elasticity of GDP for net oil-importing economies," Energy Policy, Elsevier, vol. 115(C), pages 523-544.
    7. Hanson, Daniel & Toru Delibasi, Tuba & Gatti, Matteo & Cohen, Shamai, 2022. "How do changes in economic activity affect air passenger traffic? The use of state-dependent income elasticities to improve aviation forecasts," Journal of Air Transport Management, Elsevier, vol. 98(C).
    8. repec:wly:econjl:v::y:2017:i:605:p:f236-f265 is not listed on IDEAS
    9. Bruderer Enzler, Heidi, 2017. "Air travel for private purposes. An analysis of airport access, income and environmental concern in Switzerland," Journal of Transport Geography, Elsevier, vol. 61(C), pages 1-8.
    10. Panagiotis Fragkos, 2022. "Decarbonizing the International Shipping and Aviation Sectors," Energies, MDPI, vol. 15(24), pages 1-25, December.
    11. Gallet, Craig A. & Doucouliagos, Hristos, 2017. "The impact of healthcare spending on health outcomes: A meta-regression analysis," Social Science & Medicine, Elsevier, vol. 179(C), pages 9-17.
    12. Escañuela Romana, Ignacio, 2018. "La elasticidad precio de la demanda de transporte aéreo de pasajeros en los Estados Unidos [The price elasticity of demand for air travel in the United States]," MPRA Paper 83572, University Library of Munich, Germany.
    13. Francesco Aiello & Graziella Bonanno & Francesco Foglia, 2021. "On The Heterogeneity In The Judicial Efficiency Literature: A Meta-Regression Analysis," Working Papers 202102, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    14. Francesco Aiello & Graziella Bonanno & Luigi Capristo, 2017. "Explaining Differences In Efficiency: The Case Of Local Government Literature," Working Papers 201704, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    15. Francesco Aiello & Graziella Bonanno, 2019. "Explaining Differences In Efficiency: A Meta‐Study On Local Government Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 33(3), pages 999-1027, July.
    16. Ashrafi Tannaz Alizadeh & Myrland Øystein, 2017. "Determinants of trip duration for international tourists in Norway; a parametric survival analysis," European Journal of Tourism, Hospitality and Recreation, Sciendo, vol. 8(1), pages 75-86, May.
    17. John P. A. Ioannidis & T. D. Stanley & Hristos Doucouliagos, 2017. "The Power of Bias in Economics Research," Economic Journal, Royal Economic Society, vol. 127(605), pages 236-265, October.
    18. Wang, Sen & Gao, Yi, 2021. "A literature review and citation analyses of air travel demand studies published between 2010 and 2020," Journal of Air Transport Management, Elsevier, vol. 97(C).
    19. Shawn Berry, 2024. "Is the price right? Reconceptualizing price and income elasticity to anticipate price perception issues," Papers 2402.05152, arXiv.org, revised Feb 2024.
    20. Nenem, Sukru & Graham, Anne & Dennis, Nigel, 2020. "Airline schedule and network competitiveness: A consumer-centric approach for business travel," Annals of Tourism Research, Elsevier, vol. 80(C).
    21. Miller, Benjamin I. & Dewey, James F. & Denslow, David & Miller, Edward B., 2016. "A welfare analysis of subsidies for airports," Journal of Air Transport Management, Elsevier, vol. 50(C), pages 83-90.
    22. Becken, Susanne & Carmignani, Fabrizio, 2020. "Are the current expectations for growing air travel demand realistic?," Annals of Tourism Research, Elsevier, vol. 80(C).

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    income elasticity; air travel; meta-regression analysis;
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