Airport subsidies impact on wellbeing of smaller regions: A systemic examination in New Zealand

Hanjun Wu, Kan Wai Hong Tsui, Thanh Ngo and Yi-Hsin Lin

Transport Policy, 2023, vol. 130, issue C, 26-36

Abstract: This study investigated the inter-relationships among airport subsidies, air transport activity, and regional wellbeing by applying a three-stage least squares structural model using a panel dataset of New Zealand's regions from 2010 to 2019. By investigating these inter-relationships, the study provides empirical evidence of the necessity of implementing regional airport subsidies in New Zealand, and contributes to the regional aviation literature. The empirical findings reveal that implementing airport subsidies significantly increased scheduled flight seat capacity and helped unprofitable regional airports to increase their regional air transport activity. This study also shows that increases in airport subsidies can facilitate economic growth and employment in the region in which the airport is located. More importantly, this study empirically finds that regional air transport activity, economic growth, and environmental sustainability should be critical considerations when determining airport subsidies. These findings have profound implications for regional policymakers and airport stakeholders.

Keywords: Airport subsidies; Regional wellbeing; Regional policy; New Zealand (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:trapol:v:130:y:2023:i:c:p:26-36

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DOI: 10.1016/j.tranpol.2022.10.019

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