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Measuring long-run price elasticities in urban travel demand

Javier Donna

No 74, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: This paper develops a structural model of urban travel to estimate long-run price elasticities. A dynamic discrete choice demand model with switching costs is estimated, using a panel dataset with public market-level data on automobile and public transit use for Chicago. The estimated model shows that long-run own- (automobile) and cross (transit) price elasticities are more elastic than short-run elasticities, and that elasticity estimates from static and myopic models are downward biased. The estimated model isused to evaluate the response to a gasoline tax. Static and myopic models mismeasure long-run substitution patterns, and could lead to incorrect policy decisions.

Keywords: Long-run price elasticities; Dynamic demand travel; Hysteresis (search for similar items in EconPapers)
JEL-codes: L71 L91 L98 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2021-05
New Economics Papers: this item is included in nep-dcm, nep-reg, nep-tre and nep-ure
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Downloads: (external link)
https://rednie.eco.unc.edu.ar/files/DT/74.pdf (application/pdf)

Related works:
Working Paper: Measuring Long-Run Price Elasticities in Urban Travel Demand (2018) Downloads
Working Paper: Measuring Long-Run Price Elasticities in Urban Travel Demand (2018) Downloads
Working Paper: Measuring Long-Run Price Elasticities in Urban Travel Demand (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:74

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