Geoffrey Wilson


Transport Economics Assignment 1

a)   Elasticity is the ratio of the incremental percentage change in one variable with respect to an incremental percentage change in another variable. Elasticity is usually expressed as a positive number when the sign is already clear from context.

The factors that could affect elasticity of demand for public transport operations would be the rise in public transport costs. An essential service will have a relatively inelastic demand, for example London commuters travelling into the central business district to work. This means that if the fares increase on London underground it will not significantly affect the number of peak passenger’s trips because there is no close alternative mode to the rail or tube travel apart from the car and the roads and car parks have inadequate facilities to cope with the additional flows this will leave the commuter spending a lot of time in traffic. For leisure trips that are not essential then demand will be relatively elastic, for example a family trip to the countryside may not take place if fares are high, while at lower fares or with a pricing policy the price per person would be reduced resulting in more unnecessary trips. In the case of a long distance business trip of more than 200 miles, then air travel is the only practical option if a return journey has to be made in one day. This leaves this service relatively inelastic because there are no substitute modes available but some one using air travel for leisure needs can shop around for a cheaper fare. Taxi’s are relatively inelastic because when people are out at night then they have no other way of getting home and taxi drivers can take advantage of the commuters. The bus service for students in Belfast is another example of an inelastic service because students have no choice but to use the service, Translink don’t take advantage of this.

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Most modes of public transport are inelastic because anyone using it usually does so because they don’t have the funds to pay for there own private transport and the government should take advantage of this.

b)   Since the 1950’s the United Kingdom has moved away from public transport and more towards the use of private transport. In 1952, just 27% of distances travelled were by car, 42% by bus or coach and 18% by rail. A further 11% was by bicycle and 3% by motorcycle. The distance travelled by air was negligible. By 2003, 85% of ...

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A lot of assumptions have been made in the above essay, and a better link between opinion and relevant references would boost the good attempt at a logical argument. The author doesn't really mention elasticity in part b), which would help here. 3 stars.