New report finds no evidence that aviation connectivity increases trade
26th April, 2013
The study, titled Aviation Policy Development Framework, was produced by the independent Dutch consultancy CE Delft, and commissioned by RSPB, WWF-UK and HACAN. It was officially launched this week with a presentation in Parliament by one of the authors, economist Jasper Faber, to mark the close of a consultation by the Airports Commission on aviation connectivity and the economy.
In relation to connectivity, it found that among the various studies identifying a correlation between connectivity and economic activity, none provides convincing evidence on the direction of causation. In other words, while high levels of economic activity and trade are often observed in places with good aviation connectivity (a nigh number of direct connections to different destinations), it has not been possible to show whether people fly more as a result of trade links having developed or whether the provision of direct routes encourages trade to grow.
In relation to aviation activity and economic performance, the report finds that there is some evidence of a two-way causal relationship between aviation activity and regional economic performance. In other words, at a regional level, it is possible for aviation to be both a cause and a consequence of economic activity. However:
(1) It is not clear whether there is an increase in total economic activity or whether regions with airports grow at the expense or surrounding regions without airports, (there is no evidence that aviation activity causes an increase in economic activity at a national level) and
(2) While in remote (or poorer) regions an increase in transport activity can act as a catalyst for economic activity, in ‘core’ regions such as London, where ‘agglomeration effects’ have already been exploited, economic activity appears to spur development of transport links rather than the other way round.
The issue of aviation connectivity and the UK economy was recently considered by the Airports Commission, in a paper to which AEF has responded.