| Airports, the gateways to the commercial air system, are the infrastructure critical to connecting a region to the national and international economy, especially in knowledge based industries. This belief is common among politicians, business leaders, and media and is rarely challenged or verified. Much money is at stake. The economic importance of airports is used as evidence to support publicly financed airport renovations and expansions and to defend federal subsidies to airlines serving small, rural airports.Most research used to provide evidence in favor of increased public spending on a particular airport is economic impact studies that predict regional changes in economic output, employment, and income caused by changes in airport traffic. These studies usually consider only a single airport and identify only the benefits that are forecast by surveys and regional demand driven models. Few studies have evaluated these predictions using statistical analysis of observed data, and these studies usually examine only larger airports.I improve existing methods of regional analysis to achieve a rigorous understanding of the interaction between airport policies and regional economies. I use Self-Organizing Maps, an artificial neural network, to explore data and assess the feasibility of using matched control groups to balance variables across treatment and control groups. I modify Genetic Matching methods to create control groups balanced on a large number of variables and use quasi-experimental differences-in-differences models to examine how the economic effects of commercial passenger airports vary across counties. I find evidence that commercial passenger service has positive economic effects to the local economy, and smaller spillover effects to the larger region. Economic effects of higher quality service appear stronger, and these effects are dependent on the attributes of counties. The results support the hypothesis that a lack of regional coordination by policymakers creates suboptimal funding decisions. |
