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A demand model for domestic air travel in Sweden

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  • Kopsch, Fredrik

Abstract

This article analyses demand for domestic air travel in Sweden. Using aggregated data on passenger quantities and fares, price elasticities are estimated. The robustness of the results is enforced by simple division of business and leisure travellers. The analysis also includes estimates of cross-price elasticities for the main transport substitutes to air travel; rail and road. The results indicate that aggregated demand for domestic air travel in Sweden is fairly elastic in the short-run and more elastic in the long-run. The robustness test of the model show that leisure travellers are more sensitive to price changes than are business travellers. Further, the cross-price elasticity between rail and air travel is found to lie between 0.43 and 0.5.

Suggested Citation

  • Kopsch, Fredrik, 2012. "A demand model for domestic air travel in Sweden," Journal of Air Transport Management, Elsevier, vol. 20(C), pages 46-48.
    • Handle: RePEc:eee:jaitra:v:20:y:2012:i:c:p:46-48
    DOI: 10.1016/j.jairtraman.2011.11.006
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    References listed on IDEAS

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    1. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
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    4. Mason, Keith J., 2005. "Observations of fundamental changes in the demand for aviation services," Journal of Air Transport Management, Elsevier, vol. 11(1), pages 19-25.
    5. Pagan, Adrian R & Wickens, M R, 1989. "A Survey of Some Recent Econometric Methods," Economic Journal, Royal Economic Society, vol. 99(398), pages 962-1025, December.
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    More about this item

    Keywords

    Aviation demand elasticities; Transport; Demand;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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