Abstract
We examine how new airport infrastructure influences regional tourism. Identification is based on the conversion of a military air base into a regional commercial airport in the German state of Bavaria. The new airport opened in 2007 and promotes travelling to the touristic region Allgau in the Bavarian Alps. We use a synthetic control approach and show that the new commercial airport increased tourism in the Allgau region over the period 2008-2016. The positive effect is especially pronounced in the county where the airport is located. Our results suggest that new transportation infrastructure promotes regional economic development.
Highlights
Transportation infrastructure connects regions and promotes regional development
The input–output methods and correlations are useful when assessing the benefits of new airport infrastructure, but they do not measure causal effects
Studies examining the causal effect of new airport infrastructure on regional tourism are scarce
Summary
Transportation infrastructure connects regions and promotes regional (economic) development. Tourists may well travel to rural areas when roads, railways and airports facilitate convenient and low-cost journeys They demand accommodation and amenities, cultural affairs such as theatres and exhibitions, amusement parks, etc., and their expenditures in these areas often endorse regional economic development. New empirical studies use identification strategies such as instrumental variables (IV) or synthetic control to estimate causal effects of infrastructure programmes on population and employment (Duranton & Turner, 2012; Gibbons, Lyytikäinen, Overman, & Sanchis-Guarner, 2019; Möller & Zierer, 2018), or economic development in individual regions (Ahlfeldt & Feddersen, 2018; Chandra & Thompson, 2000). We exploit the conversion of the airfield to a commercial airport specialized on LCCs as an exogenous positive infrastructure shock for the touristic sector in counties close to the airport. The results suggest that new transportation infrastructure may promote regional economic development
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