Regional aviation and economic growth: cointegration and causality analysis in Australia

Douglas Baker, Rico Merkert and Md. Kamruzzaman

Journal of Transport Geography, 2015, vol. 43, issue C, 140-150

Abstract: Air transport is a critical link to regional, rural and remote communities in Australia. Air services provide important economic and social benefits but very little research has been done on assessing the value of regional aviation. This research provides the first empirical evidence that there is short and long run causality between regional aviation and economic growth. The authors analysed 88 regional airports in Australia over a period of 1985–86 to 2010–11 to determine the catalytic impacts of regional air transport on regional economic growth. The analysis was conducted using annual data related to total airport passenger movements – for the level of airport activity, and real aggregate taxable income – to represent economic growth. A significant bi-directional relationship was established: airports have an impact on regional economic growth and the economy directly impacts regional air transport. The economic significance of regional air transport confirms the importance of the airport as infrastructure for regional councils and the need for them to maintain and develop local airports. Funding should be targeted at airports directly to support regional development.

Keywords: Regional air transport; Economic growth; Causality analysis; Australia (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (91)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jotrge:v:43:y:2015:i:c:p:140-150

DOI: 10.1016/j.jtrangeo.2015.02.001

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