Objective - The current paper investigates the role of creating public and private goods through aviation to determine state policy priorities and analyse the aviation industry's impact on the national economy in Latvia.

Methodology - The current paper involves a multi-factorial approach, combining legal, economic, and social impact assessment elements. The quantitative analysis applies an input-output model to assess the aviation industry's direct, indirect, inducted, and catalytic effects.

Findings - The assessment of multi-factorial indicators assumes paramount importance in ascertaining the contribution of the Latvian aviation sector to the nation's gross domestic product (GDP). Despite its immersion within an intensely competitive market environment, the aviation sector continues to witness substantial government interventions on a global scale. Thus, it becomes imperative to delineate the considerations that delineate public goods, ensuring their alignment with the tenets of equitable competition.

Novelty - Compared to previous studies, the input-output analysis in the aviation industry is extended to evaluate the public and private goods created by the aviation industry to determine favourable state aid policies.

Type of Paper - Empirical

Keywords: Aviation, Input-Output Model, State Aid, State Policy, Public Goods.

JEL Classification: D71; H11

URI: http://gatrenterprise.com/GATRJournals/JBER/vol8.3_2.html

DOI: https://doi.org/10.35609/jber.2023.8.3(2)

Pages 76–88