Project CEMAPRE internal
|Title||Public transport demand in times of austerity : Evidence for Lisbon's metro system|
|Participants||Pedro Goulart, Patrícia C. Melo, Nuno Sobreira (Principal Investigator)|
|Summary||This study provides new evidence on the elasticity of metro demand with respect to metro fare,|
service level, income, and fuel price for Lisbon's metropolitan area. It uses annual data since the
start of the metro operations in 1960 until 2016 and implements time series econometric methods to
obtain demand elasticities and test for the presence of structural breaks in the estimated
elasticities. The results suggest that the demand for metro service is relatively more responsive to
changes in the prices of the metro service and driving, than to changes in the levels of metro
service and income. Our novel empirical approach to the urban metro analysis also provides evidence
of instability in the long-run demand elasticities, with structural breaks corresponding to
important changes both in internal and external macroeconomic conditions to the metro operator.
Evidence of structural breaks in demand elasticities emphasizes the need of public transport
managers to adapt to changing conditions.