Exploring the Welfare Effects of Innovative Air Mobility

With the ImAFUSA Project concluding on 28/2/2026, the following post was written by Future Needs to provide an overview of their work and results in the project. See also this post on their work on Accessibility.

Over recent years, cities have been evolving towards more sustainable, interconnected, and flexible mobility options. During this time, Innovative Air Mobility (IAM) has been recognised as a solution that holds great promise, yet also faces major challenges. The advent of such a transportation method offers a major opportunity to revolutionise cities by cutting down on travel time, taking the strain off road congestion, and creating easy access to jobs and amenities. At the same time, IAM poses an essential question:

What will be the impact of this new form of transport on people’s well-being and the urban economy?

This is precisely the motivation behind Future Needs developing the IAM Welfare Tool, created within the ImAFUSA project. The goal is to estimate indicative welfare effects, helping policymakers and planners understand potential trade-offs of the introduction of IAM. The research builds upon urban economic theory, especially the equilibrium framework proposed by Straubinger et al. (2021), to explore how changes in urban mobility deployment may impact key components of welfare. The model focuses on two crucial and interrelated indicators: real estate costs and economic productivity.

Why real estate and productivity?

These two indicators capture the fundamental channels through which mobility reforms city life.

Better accessibility typically makes places more attractive and that raises the value of land and property (Real Estate). Based on the theory of the urban equilibrium, when travel costs go down and access improves, households and companies will strive for the better connected locations, thus rents and prices will rise. This mechanism may encourage development, but it can also result in affordability concerns and social inequalities. It is therefore quite rational to investigate what kind of impact IAM may have on the real estate market in order to predict potential redistribution effects and ensure that the breakthrough will increase the general welfare in an equitable way rather than amplify disparities between the center and the outskirts. Faster and more flexible connectivity can lead to more efficient labor markets (Economic Productivity). Workers can reach more jobs in less time, and firms can access larger pools of talent and clients. In economic terms, this is often expressed as a productivity gain, higher output resulting from improved spatial efficiency.

Prior studies (e.g., Andrei et al., 2022) have demonstrated that transport accessibility drives productivity by enabling better knowledge exchange, cluster formation, and specialization. Hence, evaluating potential productivity effects allows planners to link IAM investments directly with urban economic performance. Together, these indicators – the first reflecting household and firm location decisions, the other representing economic output – form a cohesive and theory-driven framework to assess welfare outcomes.

How the tool works

The IAM Welfare Tool serves as a practical modelling framework. It is based on the theoretical relationships between key variables such as population density, wages, human capital, and job clustering, which have been well established in the literature. Instead of simulating or forecasting for specific cities, the tool enables users (urban planners, policymakers or researchers) to analyze how changes in these variables under different IAM deployment scenarios might affect both real estate costs and productivity levels. The tool’s interface conveys the results in a clear, visual manner via narrative insights as well as illustrative graphs, thus assisting users in understanding how policy decisions or planning choices may impact overall welfare.

“For example, scenarios that focus on mobility gains without housing policies may show increases in productivity but also in real estate costs, thus posing the dilemma between growth and inclusiveness”, says Mahdi Golahmi from Future Needs.

The tool, by taking theoretical relationships and embedding them in a well-structured and user-friendly environment, serves as a link between academic knowledge and practical policymaking. IAM has the potential to change how people and goods move through cities, but it will also reshape where people live, how much they pay, and how efficiently economies perform. Understanding these interactions is essential before large-scale deployment begins.

City project planners and decision makers can use the IAM Welfare Tool as a method of assessing welfare effects before investing heavily. The tool implies that a city needs to consider social and spatial impacts alongside technological progress, so that future development is not only more intelligent and quicker but also fairer.

By integrating economics with practical planning necessities, Future Needs’ research paves the way for the IAM debate to “go beyond aircraft and airspace and focus on human beings, welfare, and the changing urban environment”, says Anna Palaiologk, CEO of Future Needs.