Full Citation

Title: Does Airport Size Matter? Hub Airports and Local Economic Outcomes

Citation Type: Miscellaneous

Publication Year: 2017

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Abstract: This paper considers the marginal effect of an airport hub on a metropolitan areas economy over the period 1978-2012. Evidence from fixed effect panel regressions indicates that airline hub airports increase personal income by at least 2.3 percent, and also increase establishment counts by at least 1.6 percent within their respective commuting zone (CZ). Sectors most likely to experience employment growth are air travel and hotels and lodging. Effects vary substantially by decade; hubs appear to have been at their strongest during the 2000-2009 time period, with gains in employment, establishments, and payroll uniformly observed in hub cities. Moreover, a hub premium on ticket prices was observed from 1980-1999, with the 2000-2009 period seeing significant decreases in non-stop hub market access. Evidence from an event study analysis corroborates these findings. It additionally suggests hub loss causes significant decreases in service sector employment, service establishments, aggregate wages/payroll and wages per worker in the wake of hub closures. These effects appear to operate, especially for hubs dominated by major airlines, through changes in access to markets served by non-stop flights. These findings suggest that the effects of hub airports, in most cases, operate through their ability to facilitate efficient business travel.

Url: http://marquisemcgraw.com/files/McGraw_hubs_paper_dec2016.pdf

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Authors: McGraw, Marquise J

Publisher: Consumer Financial Protection Bureau

Data Collections: IPUMS NHGIS

Topics: Labor Force and Occupational Structure, Land Use/Urban Organization, Other

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