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Airport Improvements and Urban Growth

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  • Nicholas Sheard

Abstract

This paper estimates the effects of airports on economic growth in US metropolitan areas. The estimation uses a novel technique to identify the effects of changes in local airport sizes from overall changes in the air travel network. Airport size is found to have a positive effect on local employment with an elasticity of 0.03. This means that for every job created at the airport by an exogenous increase in traffic, around four and a half jobs are created outside of the airport. The effect appears to be driven primarily by a positive effect on services employment. Airport size is also found to have positive effects on local GDP, the number of firms, population size, and the employment rate. The magnitudes of the effects on population and the employment rate suggest that the jobs created by airport expansion are spread between existing residents and workers who migrate to the area. In addition, the effect on local employment is concentrated in parts of the metropolitan area that are nearer the airport.

Suggested Citation

  • Nicholas Sheard, 2015. "Airport Improvements and Urban Growth," ERSA conference papers ersa15p28, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa15p28
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    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa15/e150825aFinal00028.pdf
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    References listed on IDEAS

    as
    1. Redding, Stephen J. & Turner, Matthew A., 2015. "Transportation Costs and the Spatial Organization of Economic Activity," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1339-1398, Elsevier.
    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.
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    7. 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.
    8. Gilles Duranton & Matthew A. Turner, 2012. "Urban Growth and Transportation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(4), pages 1407-1440.
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    10. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, August.
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    13. Gilles Duranton & J. V. Henderson & William C. Strange (ed.), 2015. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 5, number 5.
    14. Sheard, Nicholas, 2014. "Airports and urban sectoral employment," Journal of Urban Economics, Elsevier, vol. 80(C), pages 133-152.
    15. Jan Brueckner & Darin Lee & Ethan Singer, 2014. "City-Pairs Versus Airport-Pairs: A Market-Definition Methodology for the Airline Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(1), pages 1-25, February.
    16. Sheard, Nicholas, 2014. "Airports and urban sectoral employment," Journal of Urban Economics, Elsevier, vol. 80(C), pages 133-152.
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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.

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    More about this item

    Keywords

    Transportation infrastructure; Air travel; Urban growth;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • 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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