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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. 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.
    2. 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.
    3. 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.
    4. Brons, Martijn & Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2002. "Price elasticities of demand for passenger air travel: a meta-analysis," Journal of Air Transport Management, Elsevier, vol. 8(3), pages 165-175.
    5. John Baffes, 1997. "Explaining stationary variables with non-stationary regressors," Applied Economics Letters, Taylor & Francis Journals, vol. 4(1), pages 69-75.
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    Cited by:

    1. Gallet, Craig A. & Doucouliagos, Hristos, 2014. "The income elasticity of air travel: A meta-analysis," Annals of Tourism Research, Elsevier, vol. 49(C), pages 141-155.
    2. Bilal MEHMOOD & Muhammad ALEEM & Nabeel SHAHZAD, 2015. "AIR-TRANSPORT AND MACROECONOMIC PERFORMANCE IN ASIAN COUNTRIES: An Analysis," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 25(2), pages 179-192.
    3. Pagoni, Ioanna & Psaraki-Kalouptsidi, Voula, 2016. "The impact of carbon emission fees on passenger demand and air fares: A game theoretic approach," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 41-51.
    4. Hu, Yi & Xiao, Jin & Deng, Ying & Xiao, Yi & Wang, Shouyang, 2015. "Domestic air passenger traffic and economic growth in China: Evidence from heterogeneous panel models," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 95-100.
    5. Lo, Winnie Wai Ling & Wan, Yulai & Zhang, Anming, 2015. "Empirical estimation of price and income elasticities of air cargo demand: The case of Hong Kong," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 309-324.

    More about this item

    Keywords

    Aviation demand elasticities; Transport; Demand;

    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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