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OEF – another misleading economics report

9th January, 2007

Oxford Economic Forecasting (OEF) has produced another biased and misleading report for the aviation industry.Unfortunately, the government uses it, rather than commissioning independent research.The report makes much of the “contribution” of aviation to the UK economy and employment. In fact, all it actually proves is that aviation is part of the economy. This does not show that aviation makes the economy bigger and that more flying would make it bigger still. In exactly the same way, electricity generation, sanitary ware and prisons are all part of the economy and so “contribute” to it. But that does not mean that more of them makes us richer.The other major flaw is using a correlation between the amount of air travel and GDP (Gross Domestic Product) in order to demonstrate that more aviation means a larger economy. This is an abuse of statistics – correlation is no proof of causation. In reality, the amount of aviation depends on the size of the economy, not the other way round.A critique of the report has been produced (Word document – 7 pages). This can be downloaded – see below.Critique of OEF report