Driving Down Personal Aviation Demand

Anthony Wiskich

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This paper investigates the potential long-run effects of autonomous and electric vehicles, and a carbon tax, on personal domestic aviation demand in Australia. We estimate a discrete choice disutility model with two travel modes — car and air — using Australian National Visitor Survey data and Bayesian priors. We use multiplicative Fréchet errors, consistent with a constant elasticity of substitution utility function for a representative consumer of both modes. An elasticity of substitution of almost 4 replicates the observed transition to air travel as distances increase. Combining in turn electrification, autonomy, the use of overnight robotaxis, a 10 kph increase in average car speeds, and an AUS$200/tCO2e carbon tax leads to air passenger reductions of 5%, 19%, 22%, 28% and 43%, respectively. Reductions are highest for shorter flights, so aggregate emissions do not decline as much as passenger numbers, while the number of aircraft trips declines more.

Keywords: aviation economics; autonomous vehicles; decarbonisation; discrete choice travel model (search for similar items in EconPapers)
JEL-codes: O33 Q40 Q54 R40 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2025-08
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env, nep-mac and nep-tre
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https://crawford.anu.edu.au/sites/default/files/2025-08/48_2025_Wiskich.pdf

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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2025-48

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