Elasticity

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Understanding Transport Demands and Elasticities
How Prices and Other Factors Affect Travel Behavior
12 March 2013 Todd Litman Victoria Transport Policy Institute

Abstract
Transport demand refers to the amount and type of travel that people would choose under specific conditions. This report describes concepts related to transport demand, investigates the influence that factors such as prices and service quality have on travel activity, and how these impacts can be measured using elasticity values. It summarizes research on various types of transport elasticities and describes how to use this information to predict the impacts of specific transport price and service quality changes.

Todd Alexander Litman © 2005-2013

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Understanding Transport Demands and Elasticities
Victoria Transport Policy Institute

Contents
Executive Summary ........................................................................................................ 2 Introduction ..................................................................................................................... 5 Transferability.................................................................................................................. 6 Travel Demands .............................................................................................................. 7 Transport Demand Statistics and Models ........................................................................ 9 Factors Affecting Travel Demands ................................................................................ 11
Demographics ........................................................................................................................... 11 Economic Activity

References: and Resources for More Information Good summaries of transport elasticities are available in Johansson and Schipper (1997); the BTE Transport Elasticities Database; Goodwin, Dargay and Hanly (2004); Pratt (2004); and TRACE (1999) Victoria Transport Policy Institute Jodi Beggs (2012), Microeconomics 101, About.com (www.about.com); at http://economics.about.com/od/economics-basics/u/Microeconomics-101.htm Victoria Transport Policy Institute Joyce M Dargay (2010), The Prospects For Longer Distance Domestic Coach, Rail, Air And Car Travel In Britain, Report to the Independent Transport Commission (www.theitc.org.uk); at www.theitc.org.uk/docs/6.pdf Victoria Transport Policy Institute Hagler Bailly (1999), Potential for Fuel Taxes to Reduce Greenhouse Gas Emissions from Transport, Transportation Table of the Canadian National Climate Change Process Victoria Transport Policy Institute ICF (1997), Opportunities to Improve Air Quality Through Transportation Pricing, Office of Mobile Sources, USEPA (www.epa.gov/omswww/market) Victoria Transport Policy Institute Charles Komanoff (2008), We Explain Gasoline Demand (including why it’s sticky), Carbon Tax Center (www.carbontax.org); at www.carbontax.org/blogarchives/2008/05/12/we-explaingasoline-demand-including-why-its-sticky Victoria Transport Policy Institute Todd Litman (2004), “Transit Price Elasticities and Cross-Elasticities,” Journal of Public Transportation, Vol Victoria Transport Policy Institute John Morrall and Dan Bolger (1996), “The Relationship Between Downtown Parking Supply and Transit Use,” ITE Journal, February 1996, pp