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A Study on the Fare Elasticities of the Railroad Passenger Demand

Lee Jaimin 1 SangYong Han 2

1경북대학교
2동서대학교

Accredited

ABSTRACT

We estimated the transport demand functions for KTX and Saemaeul to analyze the effects of the rise in fares enforced by the Korea Railroad Corporation(Korail). We used the monthly data from April 2005 to June 2011 of KTX and Saemaeul and unit root test, cointegration test, and error correction model. The gross domestic products and fuel prices increased the transport demand for KTX, whereas its fares decreased its transport demand. In addition, the gross domestic products and fares decreased the transport demand for Saemaeul. The absolute values of the elasticities of transport demand with respect to fares in KTX and Saemaeul are less than one, which is inelastic. We analyzed the changes of transport demand and revenues in KTX and Saemaeul resulted from the rise of fares, which was enacted in December 2011. We showed that the rise in fares would increase the revenues of Korail.

Citation status

* References for papers published after 2022 are currently being built.