Topic: 16. Elasticity

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The Role of Wealth in Demand for International Air travel

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.

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A Review of New Demand Elasticities with Special Reference to Short and Long Run Effects of Price Changes

A literature review suggests that increases in real fuel prices would lead to a short run reduction in both traffic and consumption, due to more careful driving and differential responses for different journeys. In the longer run the effects would be increased. It is suggested that non-dynamic estimation methods are biased, and that transport prices have wider effects, and are a more important lever of transport policy, than has sometimes been assumed.

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The Demand for travel and for travelcards on London Regional transport

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.

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Public transport Demand Elasticities in Spain

From his study of elasticities the author concludes that patronage of public transport in Spanish cities could be increased by adjustment of the proportionate charges for cash fares and multiple-ride tickets, and by increasing fares to provide higher frequencies.

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