Estimating traffic demand risk - a multiscale analysis

Niclas Krüger

No 2012:14, Working papers in Transport Economics from CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: This paper proposes a novel method for estimating the traffic demand risk associated with transportation. Using mathematical properties of wavelets, we develop a statistical measure of traffic demand sensitivity with respect to GDP. This measure can be adapted in a flexible way to capture risk levels relevant for different investment horizons. We demonstrate the time-scale decomposition of risk with Swedish traffic demand data for 1950-2005. In general, rail transports show a stronger co-movement with GDP than road transports. Moreover, we examine the volatility exhibited by traffic demand. Our findings suggest that rail investments are more risky than road investments. Since the findings can be used for optimal investment timing and for choice among public investment alternatives, they are deemed important for public policy in general.

Keywords: Traffic demand; GDP growth; Wavelet; Risk; Real options; Discount rate (search for similar items in EconPapers)
JEL-codes: H43 H54 O11 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2012-05-04
New Economics Papers: this item is included in nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Estimating traffic demand risk – A multiscale analysis (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:ctswps:2012_014

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