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Airport Improvements and Urban Growth

Nicholas Sheard

No 1509, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: This paper estimates the effects of airports on economic growth in the local areas they serve, using data from US metropolitan areas. It applies a novel identification technique that uses the overall development of the air transport network to identify changes in airport size that are not influenced by local factors. Airport size is found to have positive effects on local employment with an elasticity of 0.02 and on GDP with an elasticity of 0.035. This means that for every job created at the airport by an exogenous increase in traffic, there are three jobs created outside of the airport. Airport size is also found to have positive effects on local wages and on the number of firms. In addition there is a positive effect on the employment rate, the magnitude of which suggests that around half of jobs created by airport expansion represent a net increase in the employment of existing residents, while half are taken up by workers who migrate to the area.

Keywords: transportation infrastructure; air travel; urban growth (search for similar items in EconPapers)
JEL-codes: H54 L93 R11 R42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-tre and nep-ure
Date: 2015-02
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