Long-run relationship between GDP and air transportation: a cointegration analysis for the Plata River area

JUAN GABRIEL BRIDA; PABLO DANIEL MONTERUBBIANESI; SANDRA ZAPATA-AGUIRRE

Bahía Blanca

Congreso; VII Congreso Nacional de Estudiantes de Postgrado en Economía (CNEPE); 2015

Departamento de Economía (UNS) e Instituto de Investigaciones Económicas y Sociales del Sur (CONICET-UNS)

The commercial aviation market has given an exponential growth in recent decades, becoming a dynamic sector with strong relevance to different economies of the world. Following cointegration methodology proposed by Engle and Granger (1987), the objective of this paper is to analyze the existence of long-term relationship between air transport and GDP for the economies of the Plata River area (Argentina and Uruguay). The results show that there is a long-run equilibrium relationship between the number of passengers and the GDP level, being the direction of causality from income to air transport. The effect of changes in the GDP on the air movement is considerably steeper in Uruguay than in Argentina, which is consistent with the characteristics of the aviation market of each country.