DEMAND ELASTICITIES: A COMMENT

This note considers the possibility of 'non-symmetric' or 'irreversible' price effects or 'hysteresis' in the transport demand relationship. The hysteresis hypothesis proposes that consumers, instead of responding similarly to rising and falling prices as is traditionally assumed, respond in a more complex manner. This response depends on the direction and size of previous price changes, and indeed on previous price history. Recent attempts to test the hypothesis include two studies of specific interest to the transport sector, concerned with estimates of the long-run price elasticity of fuel consumption. The results of these studies are presented in a table. Although the models used there may be oversimplified, they show that the response to prices is far more complex than would be predicted by traditional demand models. The author concludes that there will be a better basis for understanding the past and anticipating the future, by recognising that demand relationships and elasticities are the result of historical processes.

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/oclc/856156
• Corporate Authors:

  University of Oxford

  Transport Studies Unit, 11 Bevington Road
  Oxford,   United Kingdom  OX2 6NB
• Authors:
  • DARGAY, J M
• Publication Date: 1993-1

Language

• English

Media Info

• Features: References;
• Pagination: p. 87-90
• Serial:
  • Journal of Transport Economics and Policy
  • Volume: 27
  • Publisher: University of Bath
  • ISSN: 0022-5258
  • Serial URL: http://www.jtep.com

Subject/Index Terms

• TRT Terms: Costs; Demand; Elasticity (Mechanics); Public transit; Tariffs; Travel
• Uncontrolled Terms: Modifications
• ITRD Terms: 224: Cost; 285: Demand (econ); 5912: Elasticity; 698: Journey; 9048: Modification; 744: Public transport; 241: Tariff
• Subject Areas: Finance; Public Transportation;

Filing Info

• Accession Number: 00662549
• Record Type: Publication
• Source Agency: Transport Research Laboratory
• Files: ITRD
• Created Date: Jul 28 1994 12:00AM