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Airport subsidies impact on wellbeing of smaller regions: A systemic examination in New Zealand

Author

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  • Wu, Hanjun
  • Hong Tsui, Kan Wai
  • Ngo, Thanh
  • Lin, Yi-Hsin

Abstract

This study investigated the inter-relationships among airport subsidies, air transport activity, and regional wellbeing by applying a three-stage least squares structural model using a panel dataset of New Zealand's regions from 2010 to 2019. By investigating these inter-relationships, the study provides empirical evidence of the necessity of implementing regional airport subsidies in New Zealand, and contributes to the regional aviation literature. The empirical findings reveal that implementing airport subsidies significantly increased scheduled flight seat capacity and helped unprofitable regional airports to increase their regional air transport activity. This study also shows that increases in airport subsidies can facilitate economic growth and employment in the region in which the airport is located. More importantly, this study empirically finds that regional air transport activity, economic growth, and environmental sustainability should be critical considerations when determining airport subsidies. These findings have profound implications for regional policymakers and airport stakeholders.

Suggested Citation

  • Wu, Hanjun & Hong Tsui, Kan Wai & Ngo, Thanh & Lin, Yi-Hsin, 2023. "Airport subsidies impact on wellbeing of smaller regions: A systemic examination in New Zealand," Transport Policy, Elsevier, vol. 130(C), pages 26-36.
    • Handle: RePEc:eee:trapol:v:130:y:2023:i:c:p:26-36
    DOI: 10.1016/j.tranpol.2022.10.019
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    References listed on IDEAS

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