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Measuring Long-Run Price Elasticities in Urban Travel Demand

Javier Donna

MPRA Paper from University Library of Munich, Germany

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 is used 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)
New Economics Papers: this item is included in nep-dcm, nep-reg, nep-tre and nep-ure
Date: 2018-11-05
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https://mpra.ub.uni-muenchen.de/92233/1/MPRA_paper_92233.pdf original version (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
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:92233

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