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Airports and the Production of Goods and Services

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    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
    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
    Web page: http://www.ne.su.se/
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    1. 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.
    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. 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.
    4. 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.
    5. Stephen Redding & Daniel.M Sturm & Nikolaus Wolf, 2007. "History and industry location: evidence from German airports," LSE Research Online Documents on Economics 3680, London School of Economics and Political Science, LSE Library.
    6. Jan K. Brueckner, 2003. "Airline Traffic and Urban Economic Development," Urban Studies, Urban Studies Journal Limited, vol. 40(8), pages 1455-1469, July.
    7. 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.
    8. James E. Rauch & Vitor Trindade, 1999. "Ethnic Chinese Networks in International Trade," NBER Working Papers 7189, National Bureau of Economic Research, Inc.
    9. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 775-805.
    10. 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.
    11. Gilles Duranton & Matthew A. Turner, 2012. "Urban Growth and Transportation," Review of Economic Studies, Oxford University Press, vol. 79(4), pages 1407-1440.
    12. 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.
    13. 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.
    14. Duranton, Gilles & Morrow, Peter & Turner, Matthew A, 2013. "Roads and Trade: Evidence from the US," CEPR Discussion Papers 9393, C.E.P.R. Discussion Papers.
    15. Richard K. Green, 2006. "Airports and Economic Development," Working Papers 0002, School of Business, The George Washington University.
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