CURRENT DRAFTS/ PAPERS UNDER REVIEW
This paper considers the marginal effect of an airport hub on a metropolitan area’s economy over the period 1978-2012. Evidence from fixed effect panel regressions indicates that airline hub airports increase personal income by at least 2.3 percent, and also increase establishment counts by at least 1.6 percent within their respective commuting zone (CZ). Sectors most likely to experience employment growth are air travel and hotels and lodging. Effects vary substantially by decade; hubs appear to have been at their strongest during the 2000-2009 time period, with gains in employment, establishments, and payroll uniformly observed in hub cities. Moreover, a hub premium on ticket prices was observed from 1980-1999, with the 2000-2009 period seeing significant decreases in non-stop hub market access. Evidence from an event study analysis corroborates these findings. It additionally suggests hub loss causes significant decreases in service sector employment, service establishments, aggregate wages/payroll and wages per worker in the wake of hub closures. These effects appear to operate, especially for hubs dominated by major airlines, through changes in access to markets served by non-stop flights. These findings suggest that the effects of hub airports, in most cases, operate through their ability to facilitate efficient business travel.
This paper considers the employment effects of small and mid-size commercial airports on their local economies over since World War II, specifically 1950-2010. Using newly digitized historical aviation data in conjunction with an instrumental variables approach, I find strongest effects on the non-tradable business and professional services sector, where airport presence caused roughly 3.2 percent employment growth per decade. Evidence is mixed on whether airports caused growth overall in population, employment and payroll. Wage growth, however, was estimated to be precisely zero, overall and within all sectors/decades.
This chapter examines the effects that airports have had on economic development in cities from 1950 to 2010. It uses a novel data set consisting of previously unexploited data on the origins and history of the aviation system in the United States. Applying the method of synthetic controls to a set of medium and small airports, I examine both the overall impacts and the heterogeneity within the outcomes of various airports. Then, I use regression analysis to determine key factors differentiating successful airports from less successful ones, as it pertains particularly to population and employment growth. I find that, first, on average, cities have benefited from airports over this period – on average, airports led to a causal contribution of 0.2 to 0.6 percent per year on population and employment growth. Second, I show that cities well positioned, as of 1950, to take advantage of the boost provided by airports were the ones that benefited the most. These primary factors include: (1) closer proximity to a major research university, (2) a capital city location, and (3) climate factors, particularly higher January mean temperatures and/or hours of sunshine. City size is a consideration as well; cities in larger metropolitan areas, with larger shares of employment in nontradables in the 1950s, were also better positioned to reap the benefits that airports provided on city growth. Significant differences were not found across regions, airport governance structures, or other factors.
This paper examines the effects of the Energy Star building labeling program, particularly as it pertains to public school buildings. The stated goals of this program include increasing sustainability and reducing energy costs. Said improvements, such as improving ventilation systems, enhancing temperature control, and adding more sunlight, have been shown to improve building values and rents in the corporate sector. I examine whether a similar effect exists for “green” public school buildings, focusing on factors such as school and district enrollment, school and district graduation rates, and, additionally for California, standardized test scores. I present evidence that green schools may serve as a signaling mechanism to attract more affluent students. I also show that green schools increase English Language Arts standardized test scores by 3.4 percent, and Mathematics scores by 4.4 percent, even after controlling for factors such as parental education levels and students receiving free lunch. Results on graduation rates are mixed, and small, at best. These findings suggest that sustainable buildings could contribute to improving student performance through higher enrollments and student achievement.
PAPERS IN PROGRESS
- “Identifying The Size and Distribution of Spillover Effects from the Presence of Hub Airports”
- “The Diffusion Over Time and Space of Energy Efficiency in Building,” with N. Kok and J. M. Quigley, The Annals of Regional Science, 48(2), 2012, 541-562. Available online here.
- “The Diffusion of Energy Efficiency in Building,” with N. Kok and Professor J.M. Quigley, American Economic Review (Papers and Proceedings), 101(2), 2011, 77-82. Available online here.
- Ehrenberg, R.G., McGraw, M.J., and Mrdjenovic, J. (2006). Why do field differentials in average faculty salaries vary across universities? Economics of Education Review, pp. 241-248. Available online.
OTHER WORKING PAPERS
- McGraw, M.J. (2006). Understanding the racial disparity in graduation rates at a large Ivy League university. Working Paper 90, Cornell Higher Education Research Institute. Available online.