Analysis of the Railway Fare Elasticity in the Tokyo Metropolitan Area

Abstract

The objective of this study is to estimate the railway fare elasticity in each route and ticket type in the Tokyo Metropolitan Area. The demand model with explanatory variables as fare level, population along a railway line, economic indicator and so on is developed and parameters are estimated by using time-series data. As a result, estimated elasticity of a commuter ticket is-0.14--0.41, and of an ordinary ticket is -0.31--0.42. This study therefore makes a suggestion that the discount fare may result in a decrease in company's profit.