A Policy Analysis Based on Transport Elasticities Estimation by the AIDS Model

Abstract

The central and local governments usually pay substantial amount of subsidies to public bus companies. Hence, there is a need to implement an effective bus services policy. In this paper, the bus service demand is defined as an AI-Demand System in order to estimate various elasticities such as price, cross-price and income, of buses, trains, automobiles and taxis. This model system is applied to the bus transportation demand in Japan. From the results of this empirical study this paper demonstrates the uniqueness of bus demand in Japan, and provides several recommendations for transportation policy makers.