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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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File URL: http://www2.ne.su.se/paper/wp12_07_revised.pdf
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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
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Department of Economics, Stockholm, S-106 91 Stockholm, Sweden

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Fax: +46 8 16 14 25
Web page: http://www.ne.su.se/
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  1. Redding, Stephen J. & Sturm, Daniel M & Wolf, Nikolaus, 2007. "History and Industry Location: Evidence from German Airports," CEPR Discussion Papers 6345, C.E.P.R. Discussion Papers.
  2. 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.
  3. Richard K. Green, 2006. "Airports and Economic Development," Working Papers 0002, School of Business, The George Washington University.
  4. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 775-805.
  5. Dave Donaldson, 2010. "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure," NBER Working Papers 16487, National Bureau of Economic Research, Inc.
  6. Guy Michaels, 2006. "The Effect of Trade on the Demand for Skill - Evidence from the Interstate Highway System," CEP Discussion Papers dp0772, Centre for Economic Performance, LSE.
  7. Gilles Duranton & Matthew A. Turner, 2012. "Urban Growth and Transportation," Review of Economic Studies, Oxford University Press, vol. 79(4), pages 1407-1440.
  8. Stephen Redding & Anthony J. Venables, 2001. "Economic Geography and International Inequality," CEP Discussion Papers dp0495, Centre for Economic Performance, LSE.
  9. Blonigen, Bruce A. & Cristea, Anca D., 2012. "Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment," MPRA Paper 40304, University Library of Munich, Germany.
  10. Ximena Clark & David Dollar & Alejandro Micco, 2004. "Port Efficiency, Maritime Transport Costs and Bilateral Trade," NBER Working Papers 10353, National Bureau of Economic Research, Inc.
  11. Gilles Duranton & Matthew A. Turner, 2011. "The Fundamental Law of Road Congestion: Evidence from US Cities," American Economic Review, American Economic Association, vol. 101(6), pages 2616-52, October.
  12. Cristea, Anca D., 2011. "Buyer-seller relationships in international trade: Evidence from U.S. States' exports and business-class travel," Journal of International Economics, Elsevier, vol. 84(2), pages 207-220, July.
  13. 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.
  14. Jan K. Brueckner, 2003. "Airline Traffic and Urban Economic Development," Urban Studies, Urban Studies Journal Limited, vol. 40(8), pages 1455-1469, July.
  15. 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.
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