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Airports and the Production of Goods and Services

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Abstract

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.

Suggested Citation

  • Sheard, Nicholas, 2012. "Airports and the Production of Goods and Services," Research Papers in Economics 2012:7, Stockholm University, Department of Economics, revised 17 Jan 2013.
  • Handle: RePEc:hhs:sunrpe:2012_0007
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    10. 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.
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    Cited by:

    1. Sheard, Nicholas, 2017. "Airport consolidation and the provision of air services," Journal of Air Transport Management, Elsevier, vol. 60(C), pages 31-44.
    2. 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.
    3. Florian Mayneris, 2017. "Effets des infrastructures de transport sur le niveau et la localisation des activités économiques," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2017023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Redding, Stephen J. & Turner, Matthew A., 2015. "Transportation Costs and the Spatial Organization of Economic Activity," Handbook of Regional and Urban Economics, Elsevier.
    5. repec:eee:touman:v:65:y:2018:i:c:p:237-244 is not listed on IDEAS
    6. Alderighi, Marco & Gaggero, Alberto A., 2017. "Fly and trade: Evidence from the Italian manufacturing industry," Economics of Transportation, Elsevier, vol. 9(C), pages 51-60.
    7. Joshua Hall & Amanda Ross & Christopher Yencha, 2015. "The political economy of the Essential Air Service program," Public Choice, Springer, vol. 165(1), pages 147-164, October.
    8. Stephen Gibbons & Wenjie Wu, 2017. "Airports, Market Access and Local Economic Performance: Evidence from China," SERC Discussion Papers 0211, Spatial Economics Research Centre, LSE.
    9. Richard Florida & Charlotta Mellander & Thomas Holgersson, 2015. "Up in the air: the role of airports for regional economic development," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(1), pages 197-214, January.
    10. Nicholas Sheard, 2015. "Airport Improvements and Urban Growth," ERSA conference papers ersa15p28, European Regional Science Association.
    11. Jerónimo Carballo & Alejandro Graziano & Georg Schaur & Christian Volpe Martincus, 2016. "Endogenous Border Times," IDB Publications (Working Papers) 94638, Inter-American Development Bank.
    12. repec:eee:retrec:v:63:y:2017:i:c:p:50-58 is not listed on IDEAS
    13. Jerónimo Carballo & Alejandro Graziano & Georg Schaur & Christian Volpe Martincus, 2016. "Endogenous Border Times," IDB Publications (Working Papers) 7685, Inter-American Development Bank.
    14. repec:ssi:jouesi:v:3:y:2016:i:3:p:228-243 is not listed on IDEAS
    15. Brueckner, Jan K. & Picard, Pierre M., 2015. "Where and when to invest in infrastructure," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 123-134.
    16. repec:eee:trapol:v:63:y:2018:i:c:p:108-121 is not listed on IDEAS
    17. Nicholas Sheard, 2015. "Airport Improvements and Urban Growth," AMSE Working Papers 1509, Aix-Marseille School of Economics, Marseille, France.
    18. repec:eee:transa:v:106:y:2017:i:c:p:288-299 is not listed on IDEAS
    19. repec:rsr:supplm:v:65:y:2017:i:8:p:102-111 is not listed on IDEAS
    20. Blonigen, Bruce A. & Cristea, Anca D., 2015. "Air service and urban growth: Evidence from a quasi-natural policy experiment," Journal of Urban Economics, Elsevier, vol. 86(C), pages 128-146.
    21. Murakami, Jin & Matsui, Yurika & Kato, Hironori, 2016. "Airport rail links and economic productivity: Evidence from 82 cities with the world’s 100 busiest airports," Transport Policy, Elsevier, vol. 52(C), pages 89-99.
    22. Gibbons, Stephen & Wu, Wenjie, 2017. "Airports, market access and local economic performance: Evidence from China," LSE Research Online Documents on Economics 83630, London School of Economics and Political Science, LSE Library.
    23. Hazledine, Tim, 2014. "Searching for the sweet spot: The determinants of direct services from Canadian airports," Journal of Air Transport Management, Elsevier, vol. 41(C), pages 50-55.

    More about this item

    Keywords

    Air transport; services trade; infrastructure;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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