Air Transportation Income and Price Elasticities in Remote Areas: The Case of the Brazilian Amazon Region

Rodrigo V. Ventura, Manoela Cabo, Rafael Caixeta, Elton Fernandes and Vicente Aprigliano Fernandes
Additional contact information
Rodrigo V. Ventura: IBGE Brazilian Institute of Geography and Statistics, Rio de Janeiro 20031170, Brazil
Manoela Cabo: IBGE Brazilian Institute of Geography and Statistics, Rio de Janeiro 20031170, Brazil
Rafael Caixeta: MCA Trade, Rio de Janeiro 22775005, Brazil
Elton Fernandes: COPPE Production Engineering Program, UFRJ Federal University of Rio de Janeiro, Rio de Janeiro 21941450, Brazil
Vicente Aprigliano Fernandes: Instituto de Geografia, Pontificia Universidad Católica de Valparaíso, Valparaíso 2362807, Chile

Sustainability, 2020, vol. 12, issue 15, 1-18

Abstract: The literature, aimed at understanding the income–price elasticity of air passenger demand, bases its analysis on airport movement. The diversity of studies regarding the casualty between air transportation and economic growth are examples. Some studies covering this link, estimate the income–price relationship with the demand considering international traffic. Considering a domestic setting, where this traffic is significant in Brazil, studies related to remote regions are scarce, and the existing ones focus on governmental policies and subsidies. In addition, empirical studies on the theme consenter themselves in developed regions, such as Europe, North America, and Australia. For Brazil, where we find the Amazon region, there is no empirical research. This paper analyses the price–income elasticity of the demand regarding domestic passengers in air links from remote cities of the Brazilian Amazon. This study uses panel data regression analysis method on a database of domestic scheduled flights of Brazil´s National Civil Aviation Agency. The results show that air passengers involving remote region flights present a lower sensitivity regarding local income and an airline´s price variations than those in flights among capitals. The higher difference is in the income elasticity of the remote city of origin, which is lower than that of the air traffic among capitals.

Keywords: air transportation; Brazilian Amazon; demand; elasticity; isolated cities (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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