How New Airport Infrastructure Promotes Tourism: Evidence from a Synthetic Control Approach in German Regions

We examine how new airport infrastructure influences regional tourism. Identification is based on the conversion of a military air base into a regional commercial airport in the German state of Bavaria. The new airport opened in 2007 and promotes travelling to the touristic region Allgäu in the Bavarian Alps. We use a synthetic control approach and show that the new commercial airport increased tourism in the Allgäu region over the period 2008-2016. The positive effect is especially pronounced in the county where the airport is located. Our results suggest that new transportation infrastructure promotes regional economic development.