Airports and the Wealth of Cities

Airports are much more than places to catch planes, attend an in-transit business meeting, or do some duty-free shopping; they are among the largest investments a city and region make. Earlier I charted the geography of airport activity across U.S. metros. Today I take a close look at how airports affect the economic growth and development of cities and regions.

According to John Kasarda these include "time-sensitive manufacturing and distribution; hotel, entertainment, retail, convention, trade and exhibition complexes; and office buildings that house air-travel intensive executives and professionals. The close connection between airports and regional development has been noted in several studies. A careful statistical study by economist Richard Green finds associations between airport passengers and both metro population and employment growth, while controlling for other factors that would be expected to shape growth. A second study by economist Jan Brueckner also notes a close connection between airline passengers and regional employment growth, finding that a 10 percent increase in passengers in a metro generates a one percent increase in regional employment. It finds, however, that airports and airline service contribute more to knowledge and service-based businesses than industrial manufacturing. The study concludes that: “the evidence confirms the common view that good airline service is an important factor in urban economic development.”