Review of fares elasticities in Great Britain

INTRODUCTION

Empirical analysis of the behavioural impact of a wide range of travel variables has been conducted extensively in Britain over the past forty years or so. With the likely exception of the value of travel time (Wardman, 2001), the most widely estimated parameters have been price elasticities of demand and in particular public transport fare elasticities. The wealth of available evidence provides an excellent opportunity to obtain greater insights into fare elasticities and their determinants.

There have been numerous notable reviews of price elasticities (Ely, 1976; TRF&, 1980; Goodwin and Williams, 1985; Goodwin, 1992; Oum et al, 1992; Halcrow Fox et al., 1993; Wardman, 1997; Nijkamp et al., 1998; Pratt, 2000; De Jong and Gunn, 2001; Graham and Glaister, 2002; VTPI, 2003). The unique features of this study are that it covers a much larger amount of public transport evidence and a broader range of issues than previous reviews and, more significantly, it has developed a model to explain variations in fare elasticities across studies.

This review covers 902 public transport fare elasticities obtained from 104 studies conducted in Britain between 1951 and 2002. The markets covered are inter-urban rail travel, suburban rail travel, urban bus travel and London underground.