The authors formulate and estimate a model of international air travel demand for Israel. Consumers’ wealth is found to be a significant determinant and failure to include it in the estimated equations yields price elasticities which are biased downward and income elasticities which are biased upward.

It is concluded that aggregate approaches to forecasting demand may be appropriate for cheap investments, such as new stations, or an initial assessment of a wide range of options. For detailed consideration of expensive investments, such as new rail services, disaggregate methods based on RP and or SP data should be considered.

The authors develop a joint model for the demand for travel and the demand for travelcards. The estimates are that demand for underground travel is inelastic while the demand for bus travel is elastic. Simulation analysis attributes between one third and one half of the rise in demand for underground travel in the period 1982-87 to employment growth; and between one half and two thirds to the introduction of travelcards.