Derivation of Demand Elasticities from Travel Choice Elasticities

We derive ordinary Marshallian demand elasticities from mode choice elasticities. The fact that purely choice elasticities are conditional on a fixed number of trips is used to build the trip generation part of total travel demand. The generation elasticity for all modes in the group is the difference between ordinary and choice elasticities. Demand elasticities incorporate 'pure substitution' and 'money expenditure' effects, relating conditional demand to ordinary demand. Choice elasticities replace conditional demand elasticities and a correction compensates for the choice estimation method. The result obviates the error of treating choice elasticities as market demand elasticities. © 2015 LSE and the University of Bath