Impact of Subsidizing Air Routes in Russia on Passenger Traffic Dynamics

P. A. Lavrinenko () and A. N. Bereznyatskiy
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P. A. Lavrinenko: Institute of Economic Forecasting, Russian Academy of Sciences
A. N. Bereznyatskiy: Central Economics and Mathematics Institute, Russian Academy of Sciences

Studies on Russian Economic Development, 2023, vol. 34, issue 5, 627-639

Abstract: Abstract— The paper considers the problem of evaluating the effectiveness of subsidies for air transport in Russia in terms of attracting additional passenger traffic. The study primarily focuses on regional air routes bypassing the city of Moscow. An extensive database on air routes in Russia, the amount of subsidies to air carriers, and regional macroeconomic indicators for 2012–2021 was used to estimate the effects. Statistical hypotheses are tested using panel data models and logistic regression. The results of the analysis show that there is a statistically significant effect of subsidizing air routes in Russia in terms of changes in passenger traffic. At the same time, the response to subsidies on various air routes is different. Several typical clusters have been identified among them, which differ in the degree of passenger traffic elasticity to subsidies. Based on the binary choice model, a “reverse” test was formulated to assess the statistical significance of subsidies, which also confirmed the drawn conclusions.

Keywords: subsidies; air transportation; Russian regions; efficiency of economic policy; modeling passenger traffic; panel data; logistic regression; applied econometric analysis (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1134/S1075700723050088

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