Price Elasticity Change of the Demand for Air Cargo before and after the Finanacial Crisis: the Case in Incheon Airport

초록

The purpose of this paper is to identify the impact of financial crisis in 2008 on the price elasticity of international air cargo to and from Incheon Airport. For this, this paper uses the Difference-in-Difference method (DID) using the data before the crisis as the treatment group and the data after the crisis as the control group. After then, this paper uses the Propensity Score Matching method (PSM) with regard to the distance and GDP/capita both in origin and destination of each route. The data used are those of 20 biggest international air freight transport routes between Incheon Airport and the airports in other continents during the period of 2001-2004 and 2011-2014. The results are as follows. First, the price elasticity of the demand for air cargo has been bigger after the financial crisis compared with one before the crisis. Second, the change of elasticity in a longer distance and a lower income routes are far bigger than the other cases