An Empirical Study on the indirect impact of flight delay on China's economy

Abstract

Due to the influence on the sectors and industries that have strong relationships with the air transportation industry, flight delays have a huge impact on China's economy. In this study, the input-output method and the Ghosh model were used to analyze the indirect economic impacts of flight delays on China's economy. We also constructed simultaneous demand-fare equations to estimate the direct output of the air industry as a result of flight delay control. The final results showed that the total indirect impact of flight delays on China was ? 350.71 billion in 2013, stressing the importance of controlling flight delays. Since delay control not direct benefits to passengers and carriers, but also indirectly contributes to regional economies, efforts benefit the entire Chinese society. The great investment in flight delay governance should be shared among various producing sectors.