Tradable Credits Scheme on Urban Travel Demand: A Linear Expenditure System Approach and Simulation in Beijing

Using a linear expenditure system (LES) approach, we investigate the influences of a new mobility management measure, a tradable credits scheme (TCS), on the pattern of daily trips measured in kilometres. Generally, we assume that an individuals’ travel consists of a car mode and a non-car mode. The effects of the TCS are discussed from a microeconomic perspective and using a scenario simulation study for the municipality of Beijing. Whilst other research has shown that travellers trade their credits and are generally inclined to non-car mode, the implementation of the tradable credits scheme demonstrated here is that travellers are likely to restrain their use of both car and non-car travel modes. Furthermore, both car and non-car mode trips are shown to be price inelastic, whilst the cross-price elasticity for different districts demonstrates a complementary relationship between car and bus modes.