This article considers the regional pattern of passenger air travel in the United States, along with its determinants and effects. Passenger demand and the location of airport facilities are shown to be heavily influenced by the location of population and economic activities. This relationship is empirically examined at the state level. By combining origin and destination data with state-level economic activities, a system of two equations is tested and empirically estimated in order to capture the simultaneous impact of airport infrastructure on economic activity and economic activity on air travel. As expected, the authors find benefits to a region’s having a large hub airport located within or near its boundaries. These benefits take the form of increased overall productivity, attractiveness to high-tech and high-wage firms, and, of course, the multiplier effects of direct airport and airline employment. The increased state-level economic activity, in turn, increases the passenger demand for air travel in the state.
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