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Demand and Revenue Implications of an Integrated Public Transport Policy: The Case of Madrid

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  • ANNA MATAS

Abstract

One of the most popular options for promoting public transport use is the provision of an integrated and high‐quality public transport system. This was the strategy adopted by the regional government in Madrid, Spain, in 1986, and since then public transport patronage has increased by more than 50%. This paper has two objectives. The first is to identify the factors underlying the significant increase in the demand for public transport in Madrid. To do this, an aggregate demand function is estimated for bus and underground trips, which allows one to obtain the demand elasticities with respect to the main attributes of public transport services and also to calculate the long‐term impact of changes in those explanatory variables on patronage. The second objective is to evaluate the impact on revenue derived from the introduction of the travel card scheme, and to discuss the consequences on revenue of changes in the relative fare levels of different types of ticket without substantially affecting patronage. This latter issue is addressed by estimating a matrix of own and cross‐price elasticities for different ticket types.

Suggested Citation

  • Anna Matas, 2003. "Demand and Revenue Implications of an Integrated Public Transport Policy: The Case of Madrid," Transport Reviews, Taylor & Francis Journals, vol. 24(2), pages 195-217, May.
    • Handle: RePEc:taf:transr:v:24:y:2003:i:2:p:195-217
    DOI: 10.1080/0144164032000107223
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    References listed on IDEAS

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    1. Antonio García-Ferrer & Marcos Bujosa & Aránzazu de Juan & Pilar Poncela, 2006. "Demand Forecast and Elasticities Estimation of Public Transport," Journal of Transport Economics and Policy, University of Bath, vol. 40(1), pages 45-67, January.
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    Cited by:

    1. Alberto Cassone & Carla Marchese, 2005. "Welfare Effects of Price Integration in Local Public Transport," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(2), pages 257-274, June.
    2. David Levinson & Andrew Odlyzko, 2007. "Too Expensive to Meter: The influence of transaction costs in transportation and communication," Working Papers 200802, University of Minnesota: Nexus Research Group, revised Feb 2007.

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