economic theory based models

economic theory based models - ECONOMIC THEORY BASED MODELS...

Info icon This preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
ECONOMIC THEORY BASED MODELS Elasticity (Econometric) Models Utility-Maximizing Models
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Some Properties of Elasticity (Econometric) Models Direct estimation of demand. Models based on economic consumer behavior . Assumptions of constant elasticities (direct and cross). Simultaneous prediction of many travel decisions (generation, distribution, mode-choice, route choice). Use of abstract mode concept: Demand related to level-of-service (LOS), not to name or appearance of that mode. Implicit assumption that demand for a particular mode is not only related to LOS of that mode, but to LOS of all other modes competing in that market
Image of page 2
Elasticity Models Assume a constant elasticity demand V P dP dV p = ε P dP V dV P ε = dP dV P P V 1 1 = ε ( 29 ( 29 c P V P + = ln ln ε P P V ε α =
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Example: Assumptions: Elasticity of demand w.r.t. fare for transit = -1.25 Transit carries 10,000 passengers at $0.40/trip Problem: Find change in patronage due to fare increase to $0.45/trip
Image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern