Evaluating the economic and ecological impact for small and medium airport subsidies in China

Abstract

The small and medium-sized airports play an important role for advancing the construction of a powerful civil aviation country in China in the new era. Subsidies for small and medium airports is a way to encourage airports to increase their air transport volume and relieve the financial burden of local governments, it is also helpful to improve the local economy and ecological environment. This paper evaluated the performance of 79 subsidized small and medium airports between 2014 and 2016 by using the Cross Efficiency Model (CEM). The analysis showed that the subsidy efficiency is strongly related to airport development strategies, subsidy distribution and airport emission pollution. First, most of the airports can use subsidy better if they receive a fair and average subsidy level. Second, the airport efficiency in middle and west regions are more rely on subsidies than their eastern peers. Finally and most interestingly, the ecological indicator, PM10 reduction, affects the performance of the eastern airports much more than those in western region. For example, after adding this variable into the evaluation model, 5 airports changed their state from efficiency to inefficiency all located in eastern region, while the efficient state of airports in western keep unchanged.