An Analysis of Travel Demand in Japan's Intercity Market<BR> Empirical Estimation and Policy Simulation

This study estimates a travel demand model in Japan's intercity market with aggregate OD data. The estimated model is used to estimate the effects of introducing super high-speed-rail (HSR), and alternative levels of CO<SUB>2</SUB> emission taxation on the demands for airline and HSR modes. It is found that: (a) there is clear product differentiation between air and rail travel; (b) Japanese consumers are sensitive to travel time and frequency; (c) the proposed Tokyo-Osaka HSR services would drive airlines out of the route while stimulating substantial new traffic; and (d) CO<SUB>2</SUB> taxation would have a moderate impact on modal shift. © 2014 LSE and the University of Bath