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Airports and the Production of Goods and Services

This paper estimates the effects of airport infrastructure on local sectoral employment, using data from the United States. To address the potential endogeneity in the determination of airport locations and sizes, the 1944 National Airport Plan is used to instrument for the current distribution of airports. The Plan had a strong effect on subsequent airport construction but appears to have been unrelated to other factors for current sectoral employment. Airport size is found to have a positive effect on local employment in tradable services, with an elasticity of approximately 0.15, but no measurable effect on non-tradable services. There is a negative effect on manufacturing. The effects are relevant to the evaluation of airport construction or improvement projects that aim to attract firms by making travel to and from the local area more convenient.

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Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2012:7.

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Length: 30 pages
Date of creation: 05 Jul 2012
Date of revision: 17 Jan 2013
Handle: RePEc:hhs:sunrpe:2012_0007
Contact details of provider: Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
Phone: +46 8 16 20 00
Fax: +46 8 16 14 25
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  1. Gilles Duranton & Peter M. Morrow & Matthew A. Turner, 2014. "Roads and Trade: Evidence from the US," Review of Economic Studies, Oxford University Press, vol. 81(2), pages 681-724.
  2. Dave Donaldson, 2010. "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure," NBER Working Papers 16487, National Bureau of Economic Research, Inc.
  3. Guy Michaels, 2008. "The Effect of Trade on the Demand for Skill: Evidence from the Interstate Highway System," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 683-701, November.
  4. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
  5. Richard K. Green, 2007. "Airports and Economic Development," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(1), pages 91-112, 03.
  6. Bruce A. Blonigen & Anca D. Cristea, 2012. "Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment," NBER Working Papers 18278, National Bureau of Economic Research, Inc.
  7. Stephen Redding & Anthony J. Venables, 2001. "Economic geography and international inequality," LSE Research Online Documents on Economics 3714, London School of Economics and Political Science, LSE Library.
  8. Cristea, Anca D., 2011. "Buyer-Seller Relationships in International Trade: Evidence from U.S. States' Exports and Business-Class Travel," MPRA Paper 30347, University Library of Munich, Germany.
  9. Duranton, Gilles & Turner, Matthew A, 2008. "Urban Growth and Transportation," CEPR Discussion Papers 6633, C.E.P.R. Discussion Papers.
  10. Gilles Duranton & Matthew A. Turner, 2009. "The Fundamental Law of Road Congestion: Evidence from US Cities," SERC Discussion Papers 0030, Spatial Economics Research Centre, LSE.
  11. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 775-805, 05.
  12. Stephen Redding & Daniel M. Sturm & Nikolaus Wolf, 2007. "History and Industry Location: Evidence from German Airports," CEP Discussion Papers dp0809, Centre for Economic Performance, LSE.
  13. Clark, Ximena & Dollar, David & Micco, Alejandro, 2004. "Port efficiency, maritime transport costs, and bilateral trade," Journal of Development Economics, Elsevier, vol. 75(2), pages 417-450, December.
  14. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
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