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. |