Cheap seats to smaller cities : good news for local tourism receipts? Evidence from Italy

In this paper we focus on the impact of low cost carriers on tourism. With respect to the previous literature our paper has the advantage of using a very rich dataset, including territorially disaggregated data on tourism expenditure. To ensure greater consistency we employ an instrumental variable estimator, devised by exploiting the exogenous airports' structural characteristics. Our results indicate that proximity to a low cost operating airport, measured in terms of travel time, exerts a positive effect on total tourism receipts; the estimated impact is larger if we consider leisure tourism expenditure only.