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The demand elasticity on tolled motorways

Author

Listed:
  • Anna Matas

    (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)

  • José-Luis Raymond

    (Departament d’Economia i Història Econòmica, Universitat Autonoma de Barcelona)

Abstract

This paper analyses the elasticities of demand in tolled motorways in Spain with respect to the main variables influencing it. The demand equation is estimated using a panel data set where the cross-section observations correspond to the different Spanish tolled motorways sections, and the temporal dimension ranges from the beginning of the eighties until the end of the nineties. The results show a high elasticity with respect to the economic activity level. The average elasticity with respect to petrol price falls around -0.3, while toll elasticities clearly vary across motorway sections. These motorway sections are classified into four groups according to the estimated toll elasticity with values that range from -0.21 for the most inelastic to -0.83 for the most elastic. The main factors that explain such differences are the quality of the alternative road and the length of the section. The long-term effect is about 50 per cent higher than the short term one; however, the period of adjustment is relatively short.

Suggested Citation

  • Anna Matas & José-Luis Raymond, 2002. "The demand elasticity on tolled motorways," Working Papers wp0203, Department of Applied Economics at Universitat Autonoma of Barcelona.
    • Handle: RePEc:uab:wprdea:wp0203
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    File URL: https://ecap.uab.cat/RePEc/doc/wp0203.pdf
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    References listed on IDEAS

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    Cited by:

    1. Marcycruz de Leon & Thomas M Fullerton Jr & Brian W Kelly, 2009. "Tolls, Exchange Rates, And Borderplex International Bridge Traffic," Articles, International Journal of Transport Economics, vol. 36(2).
    2. Erik Amdal & Gunnar Bårdsen & Kåre Johansen & Morten Welde, 2007. "Operating costs in Norwegian toll companies: a panel data analysis," Transportation, Springer, vol. 34(6), pages 681-695, November.
    3. Anna Matas & Josep-Lluis Raymond & Adriana Ruiz, 2012. "Traffic forecasts under uncertainty and capacity constraints," Transportation, Springer, vol. 39(1), pages 1-17, January.
    4. Luigi Benfratello & Alberto Iozzi & Paola Valbonesi, 2009. "Technology and incentive regulation in the Italian motorways industry," Journal of Regulatory Economics, Springer, vol. 35(2), pages 201-221, April.
    5. Antonio Núñez, 2008. "Estimating the functional form of road traffic maturity," Post-Print halshs-00323046, HAL.
    6. Burke, Paul J. & Batsuuri, Tsendsuren & Yudhistira, Muhammad Halley, 2017. "Easing the traffic: The effects of Indonesia’s fuel subsidy reforms on toll-road travel," Transportation Research Part A: Policy and Practice, Elsevier, vol. 105(C), pages 167-180.
    7. André de Palma & Robin Lindsey & Fang Wu, 2008. "Private Operators and Time-of-Day Tolling on a Congested Road Network," Journal of Transport Economics and Policy, University of Bath, vol. 42(3), pages 397-433, September.
    8. Juan Gomez & Anestis Papanikolaou & José Manuel Vassallo, 2017. "Users’ perceptions and willingness to pay in interurban toll roads: identifying differences across regions from a nationwide survey in Spain," Transportation, Springer, vol. 44(3), pages 449-474, May.
    9. Thomas M. Fullerton Jr. & Angel L. Molina Jr & Adam G. Walke, 2013. "Tolls, exchange rates, and northbound international bridge traffic from Mexico," Regional Science Policy & Practice, Wiley Blackwell, vol. 5(3), pages 305-321, August.
    10. Daniel Albalate & Jordi Rosell, 2016. "Persistent and transient efficiency on the stochastic production and cost frontiers – an application to the motorway sector," Working Papers XREAP2016-04, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2016.
    11. Edoardo Croci & Aldo Ravazzi Douvan, 2016. "Urban Road Pricing: A Comparative Study on the Experiences of London, Stockholm and Milan," IEFE Working Papers 85, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    12. Snarr, Hal W. & Axelsen, Dan, 2007. "Accounting for peak shifting in traditional cost-benefit analysis," MPRA Paper 37060, University Library of Munich, Germany.
    13. Juan Gomez & José Manuel Vassallo & Israel Herraiz, 2016. "Explaining light vehicle demand evolution in interurban toll roads: a dynamic panel data analysis in Spain," Transportation, Springer, vol. 43(4), pages 677-703, July.
    14. Antonio Núñez, 2008. "Estimating the Functional Form of Road Traffic Maturity," Networks and Spatial Economics, Springer, vol. 8(2), pages 257-271, September.
    15. Cantos-Sánchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, José J. & Álvarez-SanJaime, Óscar, 2009. "Alternative pricing regimes in interurban passenger transport with externalities and modal competition," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 128-137, March.
    16. Wang, Xiaokun (Cara) & Zhang, Dapeng, 2017. "Truck freight demand elasticity with respect to tolls in New York State," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 51-60.
    17. Laurino, Antonio & Beria, Paolo & Grimaldi, Raffaele, 2010. "Financing transport infrastrucure projects in Italy: a critical analysis of the main approaches," MPRA Paper 29140, University Library of Munich, Germany.
    18. González, Rosa Marina & Marrero, Gustavo A., 2012. "Induced road traffic in Spanish regions: A dynamic panel data model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(3), pages 435-445.

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