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Globalization, long-haul flights and inter-city connections

Valeria Bernardo () and Xavier Fageda
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Valeria Bernardo: GiM-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain.

No XREAP2017-01, Working Papers from Xarxa de Referència en Economia Aplicada (XREAP)

Abstract: In this paper, we examine the impact of non-stop flights on the connectivity of European cities with distant locations from the rest of the world. We use data on inter-city passenger flows including non-stop and connecting traffic so that we have a precise measure of the economic and social links between cities. We apply a matching procedure and run regressions using instrumental variables to deal with the potential endogeneity bias of the variables for non-stop flights. We find a strong causal relationship between the amount of total traffic and the supply of non-stop long-haul flights in the considered inter-city markets. Traffic increases from the shift from ‘not having’ to ‘having’ non-stop flights can be more than double. Such increase in the amount of traffic does not seem to be related with a systematic change in fares.

Keywords: Air transportation; inter-city connections; matching analysis; instrumental variables (search for similar items in EconPapers)
Pages: 34 pages
Date: 2017-10, Revised 2017-10
New Economics Papers: this item is included in nep-tre and nep-ure
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Downloads: (external link) First version, 2017 (application/pdf) Revised version, 2017 (application/pdf)

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Journal Article: Globalization, long-haul flights and inter-city connections (2019) Downloads
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