THE DETERMINANTS OF AIR PASSENGER TRANSPORT DEMAND IN BRICS COUNTRIES: AN ECONOMETRIC ANALYSIS

Abstract

The study examined the factors that influence the demand for air passenger travel in the BRICS countries. The study employed three (3) panel unit root tests: Levin, Lin, and Chu (LLC), Im, Pesaran, and Shin (IPS), and Fisher's panel unit root test (ADF & PP). Similarly, Pedroni and Kao panel co-integration tests were employed to examine the long-run correlations between the study's variables. Additionally, the impacts of long-run relationships between the variables under study were estimated using the Ordinary Least Squares (OLS) estimators Dynamic Ordinary Least Squares (DOLS) and Fully Modified Ordinary Least Squares (FMOLS). The tests confirmed that the variables in the model were cointegrated. There was discovered to be a long-run association between demand for air passengers and gross domestic product, population, and airfares. Additionally, economic growth and population expansion have a favourable effect on demand for air travel in the BRICS, whereas prices harm demand, ceteris paribus. The findings of this study are also consistent with economic theory, confirming that the model's implications are appropriate for use in BRICS policy decision-making.