Air transportation, economy and causality: Remote towns in Brazil’s amazon region

Abstract

There is a vast amount of literature on relations between air transport activities and economic growth. The recognition that these are important relationships has aroused the interest of researchers, who have studied them with regard to remote towns. The empirical studies have concentrated more on developed areas, such as Europe, North America, and Australia. No empirical studies were found for Brazil, which holds most of the Amazon region. In this study, the Granger causality method was used to investigate for causal relationships between regular domestic air passenger transport links and the gross domestic product of small municipalities in this region. The results indicate short-and long-term, two-way causality in which gross domestic product has a stronger impact on air transport than vice versa.