A survey of recent estimates of price elasticities of demand for transport

Tae H. Oum, W.G. Waters and Jongsay Yong

No 359, Policy Research Working Paper Series from The World Bank

Abstract: This paper reviews 70 estimates of the price elasticity of demand for many different transport modes and market situations. The paper presents figures separately for passenger and freight transport and include estimates of both own-price and mode choice elasticities. It also presents some elasticity estimates on demand for gasoline, together with selected cross-price elasticities. In addition, it includes a brief exposition on the different concepts of elasticity - compensated, uncompensated, price, cross-price and mode choice - and discusses the relations between them. This paper shows that, since transportation is a derived demand, it tends to be inelastic. Although the review is confined to estimates of price elasticities, it notes that quality variables are often more important than price, particularly in the air, motor freight, and container markets. Finally, most of the estimates relate to developed countries, reflecting the availabilty of data, research resources, and domicile of the researchers. The elasticity estimates are nevertheless thought to be relevant to developing countries as well. But since intermodal competition is generally less intense in developing countries, this tends to make transport demand more inelastic, although the lower income levels in such countries may partly offset this effect.

Keywords: Environmental Economics&Policies; Economic Theory&Research; Access to Markets; Markets and Market Access; Consumption (search for similar items in EconPapers)
Date: 1990-01-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (54)

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