Summary: Short- and Long-run Demand Effects in Transport: a Literature Survey

Abstract

Demand elasticities are of crucial importance to those involved in public transit management and planning. Since they are a measure of the demand effects in changes in service levels or fares, for example, the elasticities offer planners an excellent tool for evaluating many policies. Increasingly, there is evidence that a short-run response is only a very small percentage of the total (long-run) demand effects. In the short-run, most people have few alternatives to the transportation alternatives they use. In the long-run, though, most people can adapt accordingly to changes in their situation. They can move closer to their jobs, or change jobs, or purchase automobiles, perhaps, if necessary. This report explores the increasing literature in the differences between short- and long-run demand effects in public transit. The first part focuses on methodology, and explains different estimation practices and methods. The second part briefly reports on recent empirical results from the literature survey.