A demand model for domestic air travel in Sweden
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.
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Volume (Year): 20 (2012)
Issue (Month): C ()
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