DETERMINANTS OF PASSENGER RAIL DEMAND IN PERTH, AUSTRALIA: A TIME SERIES ANALYSIS

Annual data from 1983-2008, together with modern time series econometrics methods, is used to examine the factors potentially contributing to growth in passenger rail demand in Perth, Australia. A cointegration approach is used to estimate long-run passenger rail elasticities and an error correction model to estimate short-run elasticities. The study finds that a 10-percent cut in the fare increases boardings by about 8 percent in the long run and 7.6 percent in the short run, while population exerts a significantly positive impact on demand. Rail kilometres operated and commuter perceptions are the other two most significant variables.