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A demand model for domestic air travel in Sweden
2011 (English)Report (Other academic)
Abstract [en]

The aim of this study is to estimate the price elasticity of demand for domestic air travel in Sweden. Using national aggregated data on passenger quantities and fares, price elasticities of demand are estimated with an unbalanced, in terms of stationarity, yet well performing model. The analysis also includes estimates of cross-price elasticities for the main transport substitutes to air travel, rail and road. The robustness of the results is enforced by a primitive division of business and leisure travellers. The results indicate that aggregated demand flr domestic air travel in Sweden is fairly elastic (-0.84) in the short-run and more elastic (-1.13) in the long-run. The robustness test of the model show that leisere travellers, as defined in the data, are more sensitive to price changes than are business travellers. Furthermore, the cross price elasticity between rail and air travel is found to be 0.44.

Place, publisher, year, edition, pages
Stockholm: Centre for Transport Studies Stockholm, Swedish National Road & Transport Research Institute (VTI), KTH Royal Institute of Technology, S-WoPEc, Scandinavian Working Papers in Economics , 2011. , 21 p.
CTS Working Paper, 2011:8
Keyword [en]
Air transport, Journey, Sweden, Demand (econ), Price, Elasticity, Mathematical model, Regression analysis
National Category
Research subject
SAB, Aircrafts, air transport and airports
URN: urn:nbn:se:vti:diva-642OAI: diva2:669337
Available from: 2013-12-03 Created: 2013-12-03 Last updated: 2014-03-18Bibliographically approved

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ReferencesLink to record
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