Socio-economic mobility and air passenger demand in the U.S.

Abstract In this research, we examine how socio-economic mobility affects domestic passenger enplanement volumes at U.S. airports. In addition to metrics such as income and population levels, socio-economic mobility has been identified as an important characteristic of the socio-economic fabric of market areas. As such, it is a potentially significant determinant of demand for goods and services, including air travel. Drawing on data from the U.S. domestic airline industry and newly available measures of socio-economic mobility, we empirically discern how the latter affects both yields and passenger counts at U.S. airports. The results offer compelling evidence that greater mobility is associated with lower air fares. In addition, our findings suggest that greater passenger volumes are also lower in areas marked by higher socio-economic mobility, all else equal. Collectively, our results document the significance of socio-economic mobility as a determinant of air travel demand and thereby highlight the importance of considering it in the context of forecasting, demand management and, ultimately, infrastructure planning.