Causal Relationships Between the African Aviation Industry and the Economy

Abstract

It is important for stakeholders to understand the driving forces of the aviation industry and economic wellbeing and how these sectors are interconnected. This chapter studies the relationships between the African aviation industry and the economy. It is framed as a causal linkage considering the priority investment sector that enhances the sustainable wellbeing of the society. Analyses were conducted for 38 African countries using time series data from 1981 to 2019. The results show that causal relationships are heterogeneous and context-specific. Four patterns of causal relationships between air travel demand and the economy are identified: unidirectional causality in either directions; bidirectional causality; and indeterminate causal direction. However, the causal direction in any economic or policy-related matter may change with political reforms and changes to economic policy.

Citation

Tolcha, T.D., Bråthen, S. and Holmgren, J. (2023), "Causal Relationships Between the African Aviation Industry and the Economy", Button, K. (Ed.) Airlines and Developing Countries (Advances in Airline Economics, Vol. 10), Emerald Publishing Limited, Leeds, pp. 63-88. https://doi.org/10.1108/S2212-160920230000010005