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Note: Direct Impact of an Airport on Travelers' Expenditures: Methodology and Application
Author(s) -
DeSalvo Joseph S
Publication year - 2002
Publication title -
growth and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.657
H-Index - 55
eISSN - 1468-2257
pISSN - 0017-4815
DOI - 10.1111/1468-2257.00207
Subject(s) - tourism , international airport , economics , air travel , economic impact analysis , price elasticity of demand , transport engineering , operations research , econometrics , aviation , business , geography , microeconomics , mathematics , engineering , archaeology , aerospace engineering
Economic impact studies overestimate the direct impact of an airport on travelers' expenditures. This occurs for two reasons. First, impact studies assume that the number of visitors traveling to the local area via the airport would fall to zero in the absence of the airport. Second, impact studies implicitly assume that local residents would continue to travel outside the local area in the same numbers as when the local airport is available. In other words, it is assumed that the demand for travel into the local area by visitors is perfectly elastic with respect to the time and money costs of travel, while the demand for travel by local residents is perfectly inelastic with respect to these variables. This paper develops a methodology that avoids both of these sources of error by explicitly incorporating air travel demand into the analysis. The methodology is applied to Tampa International Airport for the year 1996. It is shown that using the standard methodology would have resulted in an estimate of direct impacts sixteen times the size of the estimate made by using the methodology of this paper.