Aviation Effects on Local Business: Mapping Community Impact and Policy Strategies for Noise Remediation

Abstract

Changing flight procedures present a natural experiment which can be leveraged to study the effects of aviation noise change on business activity. While it is widely recognized that aviation produces a variety of economic benefits and environmental disbenefits, the effects of noise on businesses sit at an understudied intersection of economic and environmental impact. Using geospatial analysis of Boston and Chicago, two metropolitan areas which experienced flight path changes, this thesis assesses the extent to which businesses near airports relocate or close in response to noise increases. Business activity was compared before and after noise changes to form the basis of a difference-in-differences approach, which controls for many of the other factors which affect business activity at a given location. This study also acts as a revealed preference approach for assessing the implicit costs of aviation noise and the role of regulators in responding to those costs. No statistically significant aggregate effect of aviation noise on business activity was found. For outlier locations with large business changes and large noise changes, exogenous non-noise factors were identified which are likely responsible. Available evidence suggests that regions of large noise increase have comparable business growth to regions which do not experience noise change, even after controlling for the effects of geographic region and initial noise levels.