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Globalization, long-haul flights and inter-city connections

Author

Listed:
  • Valeria Bernardo

    (GiM-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain.)

  • Xavier Fageda

    (GiM-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain. Mail to:)

Abstract

In this paper, we examine the impact of non-stop flights on the connectivity of European cities with distant locations from the rest of the world. We use data on inter-city passenger flows including non-stop and connecting traffic so that we have a precise measure of the economic and social links between cities. We apply a matching procedure and run regressions using instrumental variables to deal with the potential endogeneity bias of the variables for non-stop flights. We find a strong causal relationship between the amount of total traffic and the supply of non-stop long-haul flights in the considered inter-city markets. Traffic increases from the shift from ‘not having’ to ‘having’ non-stop flights can be more than double. Such increase in the amount of traffic does not seem to be related with a systematic change in fares.

Suggested Citation

  • Valeria Bernardo & Xavier Fageda, 2017. "Globalization, long-haul flights and inter-city connections," Working Papers XREAP2017-01, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2017.
    • Handle: RePEc:xrp:wpaper:xreap2017-01
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