Spillover Impacts of Airline Bankruptcy : Evidence from Housing Markets in Smaller Cities

We match bankruptcy and shutdown episodes of regional airlines in the U.S. between 1995 and 2017 with a novel and comprehensive dataset on property transactions across the U.S. Our empirical findings confirm a spillover effect of airline bankruptcy on real estate prices. In particular, we find that cities between 60 and 100 miles from the closest regional airports experience a decrease in housing transaction prices in response to regional airlines' bankruptcies. Furthermore, we find that the spillover effect is related to the ownership structure of the involved regional airlines, with the housing price response being much stronger under bankruptcy episodes from independently owned airlines compared to those that are wholly owned