Public Bus Transport Demand Elasticities in India

A number of static and dynamic specifications of a log-linear demand function for public transport are estimated using aggregate panel data for twenty-two Indian states over the period 1990 to 2001. In all cases, transit demand is significant and inelastic with respect to the fare. Service quality, approximated by the density of the coverage of the transport service, seems to be an important variable that affects demand. However, service quality improvements should also be preceded by a cost-benefit analysis. Finally, social and demographic variables highlight the complex nature of public bus transit demand in India. © 2013 LSE and the University of Bath