Transit Price Elasticities and Cross - Elasticities

This article summarizes price elasticities and cross-elasticities for use in public transit planning. It describes elasticities and how they are used, and examines previous research on transit elasticities. Commonly used transit elasticity values are largely based on studies of short- and medium-run impacts performed decades ago when real incomes were lower and a larger proportion of the population was transit dependent. As a result, they tend to be lower than appropriate to model long-run impacts. Analysis based on these elasticity values tends to understate the potential of transit fare reductions and service improvements to reduce problems, such as traffic congestion and vehicle pollution, and understates the long-term negative impacts that fare increases and service cuts will have on transit ridership, transit revenue, traffic congestion, and pollution emissions.