Estimating the tourism demand impact of public infrastructure investment: the case of Malaga airport expansion

Abstract

This paper shows how structural time series models can be used to estimate the tourism demand impact of an airport expansion. The impact is measured by interventions in the series. Such interventions can be related to one-off events, permanent shifts or permanent changes in the slope of the series. The study case is the Malaga airport expansion. The impact distinguishes two effects: the new terminal building and the new runway. The results show that the infrastructure made a difference in attracting additional international tourists, especially those flying with low-cost carriers. The estimations show that the traffic increased by 6% due to the new terminal building, and the growth rate increased by 18% due to the new runway.