How do External Factors Influence Passenger Rail Demand?
This paper will discuss new work that is currently being conducted on how the passenger rail market should be segmented for the purposes of developing a forecasting framework for Great Britain (GB). This paper presents the new forecasting framework, which has now been developed following further analysis of the dataset using the latest dynamic panel data econometric techniques on a large dataset of rail demand (over 20,000 origin-destination pairs, covering six ticket types, over 18 years). As far as the study team is aware, this is the first time that dynamic panel data econometrics have been used for such an analysis, with several innovations in transport analysis contained in the paper. The paper focuses on the econometric analyses that have been carried out on the segmented dataset, the findings of those analyses, the forecasting framework that has been developed, and some of the policy implications emerging from the study. The study has permitted the simultaneous estimation of elasticities of rail demand to different measures of income, fares, demographics (population and employment), car costs and journey times, rail journey times, rail punctuality and reliability, and rail service quality (using a new service quality index developed for the study). Following on from the market segmentation work presented at the European Transport Conference (ETC) in 2009, the study team applied the latest dynamic panel data econometric techniques to the data. The adopted process enabled the team to assess a number of hypotheses, including the existence of lagged effects on each variable; whether elasticities change for different levels of the explanatory variables; whether elasticities changed by journey length (distance); whether elasticities changed over time, and whether there is any evidence of market saturation (ie, whether the link between rail demand and gross domestic product [GDP] is decreasing over time). All of these potential effects were investigated simultaneously for the first time in this study. This process was adopted for each of 28 ‘ticket type market segments’, journeys between and within three geographies, using three ticket types (with some additional coverage). This paper presents elasticities from each of the market segments, and also reviews the extent to which the hypotheses above are rejected in the dataset. Furthermore, the paper highlights which measures of the explanatory variables can explain variations in rail demand. This has particular implications for income elasticities. The paper will also present key elements of the forecasting framework, including the appropriate treatment of dynamic (lagged) effects, of variable elasticities, and market saturation effects for spreadsheet-based demand forecasting. The paper concludes with some interesting policy implications arising from the analysis, including new evidence on fare, rail journey time, and punctuality elasticities; on links between the characteristics of car travel and rail demand; and on market saturation.
- Record URL:
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Corporate Authors:
Association for European Transport (AET)
1 Vernon Mews, Vernon Street, West Kensington
London W14 0RL, -
Authors:
- Meaney, A
- Shepherd, M
- Horncastle, A
- Cartmell, J
- Wingate, W
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Conference:
- European Transport Conference, 2010
- Location: Glasgow Scotland, United Kingdom
- Date: 2010-10-11 to 2010-10-13
- Publication Date: 2010
Language
- English
Media Info
- Media Type: Web
- Pagination: v.p.
- Monograph Title: European Transport Conference, 2010 Proceedings
Subject/Index Terms
- TRT Terms: Econometrics; Elasticity (Economics); Externalities; Forecasting; Market segmented groups; Railroad traffic; Railroad transportation; Travel time
- Subject Areas: Planning and Forecasting; Railroads; I72: Traffic and Transport Planning;
Filing Info
- Accession Number: 01351686
- Record Type: Publication
- Files: TRIS
- Created Date: Sep 14 2011 11:12AM