Seeing Planely: Nowcasting GDP and Measuring Air Traffic using ADS-B Data

Abstract

Real-time data sources that have economic relevance can help provide more accurate nowcasts of GDP. A relatively new source of real-time data on US air traffic, called ADS-B, has the potential to help researchers predict economic activity before the release of official statistics. I analyze the relationship between ADS-B and official flight volume data. My results show that that since becoming mandatory in US airspace, ADS-B is a highly accurate measure of flight volume. I also train a predictive model to nowcast air transport's contribution to GDP as well as total GDP using flight volume data. My in-sample results suggest that flight volume can greatly improve nowcasts of air transport value added, especially during turbulent periods. They also suggest that flight volume can achieve a moderate increase in GDP nowcast performance relative to a baseline model.