01697810

Component

Air transport capacity expansions are often justified on the grounds that they will improve economic performance and induce growth. Such causal impacts are hard to identify empirically due to the fundamentally endogenous nature of the relationship between air transport and the economy. This paper contributes to the empirical literature on aviation-economy effects by conducting a case study of the impacts of air transportation activity on productivity in Chinese provinces. For exogenous variation the authors exploit a policy scenario created by the 2003 deregulation of the Chinese aviation sector, which was applied in all provinces of China except Beijing and Tibet. The authors find that this policy intervention resulted in substantial growth in air transport passengers and cargo. The authors estimate the causal effect of air transport on productivity by comparing GDP per employee in Tibet relative to a synthetic control region affected by the deregulation policy. The authors find a significant positive productivity effect from aviation expansion following the 2003 deregulation. Use of a differences-in-differences specification confirms this result

This paper was sponsored by TRB committee ADD10 Standing Committee on Transportation and Economic Development.

19-02999

English

17p

2019

Transportation Research Board 98th Annual Meeting

Digital/other

Figures; References; Tables

Air transportation; Case studies; Deregulation; Economic development; Productivity

China

Aviation; Economics; Law; Passenger Transportation

Transportation Research Board Annual Meeting 2019 Paper #19-02999

TRIS, TRB, ATRI

Dec 7 2018 9:38AM