PRICE ELASTICITY: A CASE STUDY

This paper aims to illustrate the effects of a change in policy from one of attempting to match farebox revenue to costs to one of attempting to maximise use of public transport within a context of constant fares. First it examines the economists concept of elasticity of demand and its uses and then looks at evidence from passenger transport operations of real elasticity values. The paper then compares the results of a case study with values expected from previous results and attempts to explain any differences which arise. The case study looks at the city of Kingston upon Hull where there was a change of fares policy in 1980. The study is made within the context of trying to define elasticity values. It looks first at an individual fare change and then examines the time series of data between 1976 and 1982 which illustrates quite clearly the differing effects on passengers and revenue of the two fares policies. It finds a long-term price elasticity value, looks at the effects of real price increases and decreases and illustrates the effects of this on the revenue showing that the constant fares policy is now producing a consistent increase in revenue. Finally the paper looks at the policy implications of such results, bringing costs into the picture to show some of the costs and benefits of the two-types of fares policy examined. It finishes by pointing to areas where further research is needed to assist policymakers in their decisions. (Author/TRRL)

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/isbn/0860501124
• Supplemental Notes:
  • Public Transport Planning and Operation. Proceedings of Seminar L held at the PTRC 11th Summer Annual Meeting.
• Corporate Authors:

  PTRC Education and Research Services Limited

  110 Strand
  London WC2,   England 
• Authors:
  • ROGERS, D A
• Conference:
  • Planning & Transport Res & Comp, Sum Ann Mtg, Proc
• Publication Date: 1983

Media Info

• Features: Tables;
• Pagination: p. 69-87

Subject/Index Terms

• TRT Terms: Benefit cost analysis; Case studies; Conferences; Demand; Economic elasticity; Economic factors; Economics; Fares; Income; Policy; Pricing; Public transit; Revenues; Ridership; Tariffs; Transportation; Travel demand; Urban areas; Vehicle occupants
• Uncontrolled Terms: Modifications; Use
• Geographic Terms: United Kingdom
• ITRD Terms: 8525: Conference; 226: Cost benefit analysis; 285: Demand (econ); 263: Economics of transport; 256: Income; 9048: Modification; 173: Policy; 744: Public transport; 241: Tariff; 8119: United Kingdom; 313: Urban area; 9084: Use; 1715: Vehicle occupant
• Subject Areas: Economics; Finance; Planning and Forecasting; Policy; Transportation (General); I10: Economics and Administration; I72: Traffic and Transport Planning;

Filing Info

• Accession Number: 00382768
• Record Type: Publication
• Source Agency: Transport Research Laboratory
• ISBN: 0-86050-112-4
• Report/Paper Numbers: Volume P240
• Files: ITRD, TRIS
• Created Date: Apr 30 1984 12:00AM