Segmentation of the Travel Market in London: Estimates of Elasticities and Values of Travel Time.

This paper reports background research carried out for an ESRC funded research project entitled "Assessing the Benefits and Incidence of Road Pricing in London". The first two stages of this work are reported here. The first stage was to segment the market for car use in Central and Inner London according to the salient characteristics of users. The second stage was to make estimates of the range of probable values of time and elasticities for each segment of the market using secondary data. A thorough literature search was undertaken and we have liaised with other relevant work in progress.

The results of our distillation of what we have found/borrowed are given in section 3. Own price elasticities of demand are presented disaggregated by mode and journey purpose. In the case of car, latest evidence emerging from the DoT study of road pricing in London has been included, showing how elasticities might be expected to rise as the toll is increased radically such as to have severe `income effects'. Values of Time are presented disaggregated by mode, journey purpose and household income group. There is a difficulty, however, in using these values in mode choice transport models and this is discussed in Section 4. Section 5 presents conclusions and discusses application of the results of this paper in the ESRC project. Section 6 lists references and Section 7 is an Appendix containing brief highlights from many of the source articles consulted in our literature review.