Economic contribution of essential air service flights on small and remote communities |
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| Institution: | 1. The Ruppin Academic Center, Emeq Hefer 40250, Israel;2. The Hadassah Academic College, Jerusalem 91010, Israel;1. The Ruppin Academic Center, Emeq Hefer 40250, Israel;2. The Hadassah Academic College, Jerusalem 91010, Israel;1. University of Antwerp, Prinsstraat 13, 2000 Antwerp, Belgium;2. University of Leuven, Kasteelpark Arenberg 30 - box 2456, 3001 Heverlee, Belgium;1. CITTA, Department of Civil Engineering, University of Coimbra, Pólo II, Coimbra 3030-788, Portugal;2. School of Business Administration, Hebrew University of Jerusalem, Mount Scopus 91905, Israel;3. Department of Civil and Environmental Engineering, Massachusetts Institute of Technology, Cambridge 02139, USA;1. Universidad de Barcelona, Facultad de Economía y Empresa, Av. Diagonal 690, 08034 Barcelona, Spain;2. Universidad de Las Palmas de Gran Canaria, Facultad de Economía, Empresa y Turismo, Despacho D. 2-12, 35017 Las Palmas de Gran Canaria, Spain;3. Universidad Europea de Canarias, Inocencio García 1, 38300 La Orotava, Spain;4. Public-Private Sector Research Center - IESE Business School, University of Navarra, Spain |
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| Abstract: | The Essential Air Service Program (EAS) has attracted considerable criticism and has been a target for either modification or complete termination almost since its inception through the Airline Deregulation Act in 1978. Although its opponents emphasize the program's inefficiency, its supporters claim that the program is crucial to accessing small and remote communities, which helps them develop economically and socially. This paper demonstrates the economic contributions of EAS flights to small and remote communities. Using a two-stage least squares estimation, the major findings indicate that a 1% increase in air passenger traffic in EAS airports with a minimum annual air passenger traffic of 1000 likely leads to a 0.12% increase in per capita income of the community served by that airport. Our results also suggest that EAS communities that are able to sustain their subsidized flights experienced higher per capita income growth in the 1999–2011 period than did ex-EAS communities that lost their flights as a result of non-eligibility. |
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| Keywords: | Essential air service flights Regional air transportation Economic contribution Two-stage least squares estimation |
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