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Aggregate estimation of the price elasticity of demand for public transport in integrated fare systems: The case of Transantiago

Author

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  • de Grange, Louis
  • González, Felipe
  • Muñoz, Juan Carlos
  • Troncoso, Rodrigo

Abstract

Price elasticities of demand for public transport are a key determinant in evaluating the impact of changes in fares on user flows, yet in many integrated fare transit systems, estimating these indicators is often hampered by two realities: the fare changes for different modes are implemented simultaneously and their magnitudes are highly correlated. This strong collinearity is particularly problematic in linear or log-linear models, commonly used for elasticity estimation, and in a case study of Santiago, Chile, robust results with such specifications proved elusive. This paper presents a method based on discrete choice models to estimate the elasticities in an integrated fare system that overcomes these econometric problems, generating results that are both robust and consistent with those reported in the literature. The proposed models are also easy to update and evaluate.

Suggested Citation

  • de Grange, Louis & González, Felipe & Muñoz, Juan Carlos & Troncoso, Rodrigo, 2013. "Aggregate estimation of the price elasticity of demand for public transport in integrated fare systems: The case of Transantiago," Transport Policy, Elsevier, vol. 29(C), pages 178-185.
  • Handle: RePEc:eee:trapol:v:29:y:2013:i:c:p:178-185
    DOI: 10.1016/j.tranpol.2013.06.002
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    References listed on IDEAS

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    Cited by:

    1. Chowdhury, Subeh & Ceder, Avishai (Avi), 2016. "Users’ willingness to ride an integrated public-transport service: A literature review," Transport Policy, Elsevier, vol. 48(C), pages 183-195.
    2. Hao Li & Xiaohui Yang & Xiao Zhang & Yuyan Liu & Kebin Zhang, 2018. "Estimation of Rural Households’ Willingness to Accept Two PES Programs and Their Service Valuation in the Miyun Reservoir Catchment, China," Sustainability, MDPI, Open Access Journal, vol. 10(1), pages 1-19, January.
    3. Rahman, Syed & Balijepalli, Chandra, 2016. "Understanding the determinants of demand for public transport: Evidence from suburban rail operations in five divisions of Indian Railways," Transport Policy, Elsevier, vol. 48(C), pages 13-22.
    4. repec:kap:transp:v:45:y:2018:i:5:d:10.1007_s11116-017-9775-1 is not listed on IDEAS

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