Measuring and Understanding the Relationship Between Air Service and Regional Economic Development (2022)

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76 C H A P T E R 5 Telling the Airport’s Story of Contributions to Regional Economic Development: Tools and Suggestions This chapter includes tips and suggestions on how to communicate the message about the airport’s contributions to the regional economy. Recognizing Audience Segments and Varying Degrees of Interest Just as there are variations in markets for different goods or services, there are different markets or audiences for information about the airport and air services. Market segmentation is the process of dividing a broad group of consumers or an audience into smaller categories based on some common element or shared characteristic, such as age groups or background. Segmenting a market or audience into different categories can help focus the message about an airport’s contributions to the region to meet the segments’ needs and interests. – General public or media. The broader public likely will have a passing interest in the airport’s contributions to the regional economy. Many people do not appreciate the how many employees in different jobs are required to make commercial (or general) aviation function effectively let alone the contributions that air service makes to the economy. High-level summaries of the airport’s overall contributions to the regional economy may be sufficient for most of their purposes. Some will appreciate how air service enables or facilitates other regional economic activity. In some cases, they may express support for the airport and air service as a result. For others, understanding the contributions to regional economic development may help offset reservations about noise or environmental impacts. – Business audience / major employers. These groups may focus more on how the airport and air service enables business operations. Those in industry sectors more dependent on air service will have the greatest interest, as changes in air service are most likely to directly affect their operations (and bottom line). Conversely, the levels of interest from those in sectors that are less reliant upon air service will likely be more in line with the general public’s. – Regional economic development organizations’ level of interest may depend on the extent to which they already understand – or can be led to understand – the extent to which air service facilitates economic activity in key target industries along with other sectors that may generate quality jobs. – Elected/appointed officials will likely have more interest than the general public because many airports are entities of local government. This group can include citizens appointed to airport board positions who may or may not have an extensive background in commercial aviation and/or economic development. Understanding how air service contributes to economic activity off the airport’s

77 property may encourage them to be more supportive of airport development initiatives. For those who are ambivalent or negative toward the airport, better understanding the linkage with regional economic activity may help neutralize those perceptions. – Other professional audiences (e.g., airport boards and researchers). These groups may have more in-depth professional interests in how the airports and air service enable regional economic activity. They may also be among those with better understanding of economic concepts and will be receptive to the information. Challenges Conveying Information to Different Audiences There are two basic challenges that airports and researchers inevitably encounter with presenting the results of any analyses of airport economic impacts and airports’ relationships with regional economic activity. Challenges with Economic Concepts The general level of knowledge about economics among the U.S. public is not high. Research from the Federal Reserve Board shows that less than four in ten high school seniors or adults could answer basic questions about economic terms and concepts that are essential for understanding economic events and issues reported in the news media. No matter what the economic content of questions or the test format, the study results remain the same—youth and adults show a great deal of ignorance when it comes to basic economics. (Federal Reserve Bank of Minneapolis. 1998) Airports need to recognize that many people may not understand or appreciate the significance of information about an airport’s economic impact or its contributions to the regional economy. Audiences with more understanding of business, finance, and economics are more likely to comprehend different concepts of economics and the contributions that air service makes to the regional economy. For a general audience, however, it will help if information is provided at basic or high levels. This may be limited to the total number of jobs (and total wages) associated with direct and indirect impacts of the airport. Many people are familiar with the term “multiplier impacts,” but may not fully understand how they are estimated. Because indirect and induced impacts are the result of a modeling exercise, many may be skeptical of the results. Figure 35: Conceptual Complexity and Understanding

78 Similarly, although many in the public may have heard of the concepts of GDP or Economic Output because the concepts are occasionally discussed or reported in the news, most cannot distinguish the two, understand how they are calculated, or recognize the significance of what they reveal. Appendix IV includes a simplified, common-English explanation of the difference between GDP and Economic Output (sometimes also called total economic activity), with an example that illustrates that difference and how both are calculated. The Challenge of Understanding Large Numbers Research shows that most people have difficulty comprehending large numbers. In particular, people have difficulty reasoning about magnitudes outside of human perception – whether the scale might be microscopic or geologic. This even includes individuals who might be expected to appreciate such matters, like students in scientific, technical, engineering, and mathematics fields. The New York Times published an article in June 2021 about the difficulty that people have with understanding large numbers. “Billions” and “trillions” seem to be an inescapable part of our conversations these days, whether the subject is Jeff Bezos’s net worth or President Biden’s proposed budget. Yet nearly everyone has trouble making sense of such big numbers. Is there any way to get a feel for them? As it turns out, there is. If we can relate big numbers to something familiar, they start to feel much more tangible, almost palpable. “…{V}ast sums of money become more comprehensible if they are reframed in terms of more familiar amounts. In a 2009 blog post, the mathematician Terry Tao rescaled the entire United States federal budget to the annual household spending for a hypothetical family of four. In Dr. Tao’s rescaling, a $100 million line item in the budget became equivalent to a $3 expenditure for the family.1 The task for airports – and others working with concepts like these – is making the information relatable to different audiences. As the Times article suggests, if large numbers can be rescaled into something relatable, more people will be able to grasp the magnitude of the impacts and the changes being described. Putting all references to comparable values into a common scale will improve clarity. For instance, a larger portion of the population will understand the impact of cutting $100 billion if it is compared to a $1,200 billion deficit rather than a $1.2 trillion deficit. Some will do better with “short form” expressions. For example, if other figures being discussed are expressed in millions, people will better understand a comparison against 1,200 million instead of 1,200,000,000 or 1.2 billion. A Template for Describing the Airport’s Contributions to a Regional Economy This section offers a basic template for airports to consider or adapt to present information to audiences. It broadly follows the topics included in the case studies. 1 https://www.nytimes.com/2021/06/17/science/math-numbers-federal-budget-tao.html

79 Recognizing the Audience Understand the audience so that information at an appropriate level of complexity is assembled. Most commonly, airports tend to communicate with the broad public via press releases and information posted on its website. However, airport officials often are speakers at community events where an audience includes representatives of local business, economic development, and government. All will want to understand not just the airport’s economic effects, both on the airport’s property and throughout the region. – Developing background information on the airport and its service offerings – Include basic information on the airport, including – passenger traffic (especially O&D traffic) – number of nonstop destinations served (domestic and international) – capacity (available seats and flights) provided, noting seasonality if relevant – cargo and freight tonnage handled (inbound and outbound) – Suggestions for how to display these types of information most clearly and effectively are discussed in the section on Using Graphics to Make Your Point. Maps of the nonstop destinations served will help readers understand the breadth of service offerings and directionality of markets. Figure 36 highlights the extent to which Des Moines has service to major midwestern and eastern locations but lacks nonstop service to the west coast. Figure 37 shows the lack of service from Columbia, Missouri to the southeast. Where service has changed significantly over time, it may be helpful if the maps can illustrate locations where service has been gained or lost. Figure 36: Nonstop Markets Served at Des Moines, June 2019 Source: Diio Mi by Cirium

80 Figure 37: Nonstop Markets Served at Columbia, June 2019 Source: Diio Mi by Cirium To highlight how connectivity may have improved over time without the addition of service to new markets, maps could also indicate where capacity to major markets increased (e.g., additional frequencies or up-gauging aircraft). Describing the Airport’s Market Provide a descriptive overview of the market served, including the statistical area (either an MSA or CSA) and/or the catchment area (if quantified based on existing air service offerings). Again, maps of the catchment area or MSA/CSA will be useful for most readers. The basic socioeconomic metrics should include – Population – Total employment – For certain audiences, this information should include employment in key industry sectors and/or major employers in the region that tend to rely on commercial aviation – Where available, information on Foreign Direct Investment and related employment can provide valuable indicators of aviation-related economic activity – Factors associated with regional QOL (e.g., educated workforce, per capita income) It can be helpful for audiences to understand how these variables have changed over time, so several years of data can reveal major trends. Explaining and Illustrating Economic Concepts Depending upon the audience, different terms or concepts may need to be defined. Narrative descriptions or definitions are often not sufficient, and teaching economics in old, traditional ways can be considered “monotonous.” Because different people learn in different ways, even for professionals and those familiar with economic concepts, research shows that using illustrations or examples can be effective ways to explain economic concepts.

81 Using graphic, visual and audio mechanisms is effective for several reasons: (i) they tend to stimulate ones thinking of general terms and concepts more so than other types of learning mechanisms, (ii) effective visuals and videos greatly improves ones understanding of certain topics, and (iii) visuals and audio tend to be more useful and relevant when they are geared towards specific content. Icons or photos can help make these concepts more relatable. Different types of graphics are surveyed in the next section. Using Data, Models, and/or GIS Capabilities to Estimate Impacts and Locate Businesses (by Industry Sector) Depending on the analysis needed (and audience), the airport will need to use different sets of data and different models or estimating techniques to generate the results. A range of sources of data and models are discussed in Chapter 2. Traditional economic impact studies will require one type of model (e.g., input– output models or other options). GIS models like those discussed earlier can reveal the location of different businesses within a given proximity to the airport. Local universities’ schools or departments of economics, business, or geography may have these models. Various consulting firms also have expertise in these types of analyses. Identifying the relationship of changes in air service to a region’s economic strength by industry sector requires a different set of data and analyses. The analysis can be accomplished via spreadsheet applications like MS Excel, and the data can be obtained from various public sources. Analyses of changes in connectivity require some modeling that can be accomplished using spreadsheet applications and the formulae shown in the Contractor’s Technical Report or Compilation of Case Studies. Using Graphics to Make Your Point People understand information in different ways. Some prefer text or stories. Some prefer graphics, such as charts, maps, tables, or pictures. Research shows that appropriate infographics and other visual aids can significantly improve both comprehension and retention of materials, especially more complex matters with which readers may not be familiar. Remember: there were pictures drawn in caves before there was written text! One of the benefits of graphics is to help simplify or distill data. Information on economics, employment, and air service often lend themselves to graphics since that information often shows relationships between different concepts or changes over time. Visualization aids cognition. Tables can be useful, but tables force the reader to “do the work” of examining the data and drawing conclusions. If a table is your preferred option, be sure to provide a description in the text of what the table reveals. If a table is important only for providing data for possible future users, move it to an appendix. Guiding Principles for Graphics Show the data clearly. Clear, detailed, and thorough labeling is needed. Be sure to include meaningful text on the graph itself (e.g., axis labels, legend, or call-out boxes). Write out explanations of the data on the graphic itself. Label important events in the data. Avoid abbreviations that will force readers to “work” to understand. Avoid words that run vertically if possible. Use a clear type font that employs both upper and lower case letters.

82 Use simplicity in design of the graph. A clean, uncluttered look will help readers understand. Avoid distortions, shading, perspective, unnecessary color or decoration. Do not use 3-dimensions (height, width, depth) to represent something that only needs to be represented in 2-dimensions (e.g., changes in enplanements over time). Be careful with color; users with some color blindness need to be able to understand distinctions. Use alignment on a common scale. Good graphs support accurate estimation of the quantities represented. Readers need to understand the scale used so that they can estimate the quantities displayed on the graph. Use a single linear scale whenever possible. Add gridlines to assist with accurate comparison and estimation. Use standard forms that work. Accurate interpretation of graphs relies on a shared understanding of the definition of the graphical objects used. Standard forms of charts are discussed in the next section. With monetary units over time, use constant dollars. In time-series displays of money, deflated and standardized units of monetary measurement (constant dollars) are nearly always better than nominal units. Types of Charts There are an infinite number of charts and graphics, and many innovative graphics are highly effective means of communicating information. But most consumers of information on air service and economic activity will expect a limited variety. Different types of charts are best for different types of data and relationships. Bar Graphs Bar graphs are used to compare things between different groups. A bar graph uses the height of different bars to compare quantities. The bars can be shown vertically or horizontally. Bar charts showing one variable can also be used to track changes over time. Figure 38 is an illustration of a bar chart that shows a change over time among different but related variables (seating capacity offered by an airline by type of aircraft in two time periods) with additional graphics (the arrows) included to highlight the changes. Displaying the actual data along with the bars is an option. Figure 39 is a “stacked bar” that illustrates both the change of two individual, related items (e.g., auxiliary charges) along with the total amount of revenue derived.

83 Figure 38: Seat Capacity Offered by United Airlines at Washington Dulles International Airport, First Full Week of January 2010 vs. 2019, by Type of Aircraft Source: Diio Mi by Cirium Figure 39: Airline Revenue from Baggage Fees and Reservation Change/Cancellation Fees Approached $9 Billion Before the Pandemic Source: BTS One challenge with stacked bar charts is that readers or viewers can have difficulty interpreting the changes in individual variables over time. In Figure 39 for example, it is relatively easy to see how baggage

84 fees changed because the “base” is always zero and readers do not mentally need to do any math to see that those fees rose from just over $1 billion in 2008 to nearly $6 billion in 2019. For the change in reservation fees and cancellation fees, however, readers need to estimate the values. If more than one variable is shown in a chart (Figure 40), understanding changes in variables (e.g., seating capacity provided by Delta between 2010 and 2016) is more difficult. Figure 40: Change in Available Departing Seat Capacity by Major Carrier at Spokane, 2008-2019 Dual-Axis Charts A dual-axis chart (also called a multiple axes chart) uses two axes to illustrate the relationships between two variables with different magnitudes and scales of measurement. To clarify the distinction between variables, one may be displayed using bars and the other with lines. The separate axes are needed if the scale of the variables shown vary significantly. Figure 41 uses a line/bar dual-axis chart to display the changes in and available seat capacity flights over time. If both seats and flights used the same scale, the differences in the scale of the variables would make changes in the number of flights difficult if not impossible to discern. However, a challenge with dual-axis charts is that some readers have difficulty interpreting the data correctly, not immediately recognizing which axis is associated with which variable. 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Frontier American (and US Airways) United (and Continental) Delta (and Northwest) Southwest Alaska

85 Figure 41: Change in Available Capacity and Flights at Des Moines Source: Diio Mi by Cirium Time-Series Graphs The time-series graph is among the most common type used in economics. A time-series graph shows how the value of a particular variable or variables changed over some period of time. One of the variables in a time-series graph is time itself. Time is typically placed on the horizontal axis in time-series graphs. The other axis can represent any variable whose value changes over time. Time-series graphs often use lines rather than bars to show the progression of the variable. Figure 42 is an example, showing changes in the (current dollar) spot price of jet fuel over time.

86 Figure 42: Change in Cost of Jet-A Fuel (U.S. Gulf Coast Spot Prices) Source: U.S. Energy Information Agency Because the value of money changes over time with inflation, it is important to show monetary values in constant dollars. Figure 43 above suffers from not showing such information. Figure 42 below, however, shows the change in average domestic airfares in both current (nominal) and constant (“inflation-adjusted”) dollars, along with a commonly used index (the CPI-U) that shows how a broad array of consumer prices have increased over time. Figure 43: Average Domestic Airfares Have Not Kept Pace with Inflation Source: U.S. BTS

87 Pie Graphs A pie graph (sometimes called a pie chart) is used to show how an overall total is divided into parts. A circle represents a group as a whole. The slices of this circular “pie” show the relative sizes of subgroups. In a pie graph, each slice of the pie represents a share (percentage) of the total. As implied, pie charts are useful only to show percentages or shares, not absolute numbers. Figure 44 shows the market share of enplaned passengers held by different airlines at Des Moines International Airport (DSM) for 2019. Figure 44: Airline Market Share at DSM, 2019 (% of enplaned passengers) Source: Diio Mi by Cirium Using Icons and Infographics to Illustrate Concepts Using icons can help convey information and are good ways to represent text. A good infographic includes both text and visual representations. The example shown in Figure 45 from Airlines for America (the industry trade organization) illustrates the wide number of different jobs associated with air transport and can help readers unfamiliar with the industry understand the amount and variety of employment tied to aviation.

88 Figure 45: Example of Pairing Icons with Messaging to Illustrate Breadth of Employment Impacts Suggestions for Using Maps as Graphic Aids Maps are an excellent visual aid because they are a basic visual representation of geography and a unique method for conveying a great deal of information. Maps can easily display information about an issue in a succinct way. While they obviously show the location of different things, maps can also include other information (e.g., by enlarging a circle at a city, maps can show the size of the population or the number of O&D travelers, or employment in particular industry sectors). Figure 46 is an example of one of the maps from the case studies that shows the locations of Raleigh–Durham International Airport and the largest PST firms in the area.

89 Figure 46: The Raleigh–Durham Region, its Airport, and Largest PST Firms Within a 60-Minute Drive from the Airport Source: ESRI ArcGIS Business Analyst Personalizing the Analysis / Airport Story with Individual Examples Personalizing an airport’s message also can help an audience relate to a situation that they themselves have no direct knowledge or experience. Examples may be workers at an airline, at the airport, at a supplier industry, or in an industry that relies on air service to reach their customers or suppliers. Anecdotal information is not statistically significant, but they can be a powerful tool for helping explain a message or concept. Anecdotes reveal. Anecdotes communicate the emotion and the meaning of an event. A good anecdote will have all of the characteristics of the category it represents …. Anecdotes make facts memorable. Anecdotes make research comprehensible; they communicate meaning and emotion, and they bring a message home. Good anecdotes enable generalization. “You can throw away the data.” Good anecdotes are really an exercise in generalization: We have generalized from the data to the anecdote; we can generalize from the anecdote about the data and generalize to other contexts and populations. (Morse, 2006, pp. 1019-1020)

90 What Product Options Are Available to Communicate the Airport’s Contributions to the Regional Economy? The range of options for communicating the airport’s relationship to economic activity is wide. While it is up to the airport to decide which might be most appropriate for different stakeholder audiences, it may help if the airport could consider the advantages and disadvantages of each. Bear in mind that all the suggestions on how best to communicate concepts noted above apply equally to each of the product suggestions shown in Table 13 below. Table 13: Options for Presenting Results, with Advantages and Disadvantages Option Advantages Disadvantages Traditional white paper report with Executive Summary – Most people are familiar with them – People can focus on Executive Summary and only refer to the body of report as needed – Can take a relatively long time to prepare (editing, revisions) – Most of the material will not be read by most audiences Executive Summary only – Familiarity and short time required to read – Time (and cost) savings from not preparing full report – Full analysis still required before results can be distilled into Exec Sum, so cost savings may not be as large as expected – Detailed data not available for interested readers, will need to contact airport or report author for further information Graphic-heavy executive summary (minimal text) – Most visually appealing and thus more memorable – Most succinct – More likely to be read completely – Full analysis still required before results can be distilled – May require more time and different skills (graphics) to prepare. Photographs need to be high quality – Details lost, nuance lost – Production costs for hard copies may be greater due to higher quality paper needed Website – Information may be available to wider audience – Users are accustomed to finding information online – Full analysis still required before results can be distilled – Requires different skill set to develop Press release – Target audience is mass media and general public, so high-level results only – May need to reference or link to full report or other summary, meaning no shortcut around full analysis Social media – Potentially wide audience – Full analysis still required before results can be distilled – Requires different skill set to develop – Audience limited to those with social media accounts