Macroeconomic Determinants of Air Transportation: A VAR Analysis on Turkey

Abstract

The aim of this study is to investigate the relationship between air transport and macroeconomic variables for the 1983-2015 period in Turkey, by using the VAR analysis. Three key indicators of air transport were used in the study. These were domestic passengers, international passengers and international cargos. In this study, three different models were created using indicators of air transport, including macroeconomic variables assumed to be related to them. In the first model, the relationship between domestic passenger demand and per capita gross domestic product (GDP), interest rate and consumer price index (CPI) was examined. In the second model, the relationship between international passenger demand and gross domestic product (GDP), interest rate and consumer price index (CPI) was examined. In the third model, the relationship between international cargo demand and gross domestic product (GDP), foreign trade volume, industrial production index and foreign direct investment amount was investigated. The results of the study show that per capita income, gross domestic product and consumer price index variables for domestic and international passenger demand are quite significant. In the case of International cargo demand, gross domestic product and industrial production index variables were observed to be influential.

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