Road Transport Elasticity by Activity

Road Transport Elasticity by Activity

Source: Adapted from Victoria Transport Policy Institute (2002) Transportation Elasticities.

The concept of elasticity is very useful for understanding the economic behavior of transport supply and demand. Depending on the transport activity, mobility is linked with different elasticities. Emergencies tend to have low, if any, elasticity. Commuting also has a very low elasticity as this form of mobility is related to a fundamental economic activity that provides income. This fact is underlined by empirical evidence that shows that drivers are marginally influenced by variations in the price of fuel or tolls in their commuting behavior, especially in highly motorized societies. Since work is a major, if not the only, source of income, commuting can not be forfeited under any circumstances short of being cost-prohibitive. Activities that confer limited economic benefits tend to have higher elasticities. Social and recreation-oriented movements are commonly those whose users have the least cost tolerance. Consequently, as transport costs increase, recreational movements (tourism) are those that experience the fastest decline. In the above figure, for each ΔC(6) transportation cost increase, there is a ΔT(6) decrease in traffic.