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Price elasticity of demand for urban public transport: An analysis for bus and underground services of the Autonomous City of Buenos Aires
This paper estimates the demand elasticity of two urban public transport services within the limits of the City of Buenos Aires, i.e., underground subway services and buses whose entire route runs within the boundaries of the city. I use a monthly database from 1993 until 2013 and, by using two diff...
This paper estimates the demand elasticity of two urban public transport services within the limits of the City of Buenos Aires, i.e., underground subway services and buses whose entire route runs within the boundaries of the city. I use a monthly database from 1993 until 2013 and, by using two different methodologies –dynamic models and cointegration and error correction models–, different regressions are analyzed to find the short and long-term coefficients, with particular emphasis on price-elasticities of the two demands. Consistent with the literature review, I find inelastic demands with long-term coefficients higher than short ones. In the case of the subway, where more explanatory variables are available, both econometric methods generate negative own price-elasticities between 0.1 and 0.2. Meanwhile, regarding buses, where the estimation is more difficult, the demand reacts more slowly to changes in prices, which is shown by larger differences between short and long-term estimates, even though the latter are close to what international experience shows (-0.5).
