Domestic transport charges: Estimation of transport-related elasticities

Income elasticity measures the extent to which the demand for transport changes in response to a change in consumer income, while price elasticity measures how sensitive the quantity demanded of transport is to transport prices or the prices of other goods. [...] This could be because there is insufficient variation in the price data for identification.13 The issue is exacerbated by the fact that due to the lumpiness of expenditures of certain types (e.g. [...] Cross-price elasticity Cross-price elasticity measures the responsiveness of the quantity demanded for a good to the change in the price of another good. [...] In particular, a 10% increase in the price of Other transport is estimated to increase Petrol demand by 12%, whereas a 10% increase in Petrol price is estimated to increase the demand for Other transport by 9.1%. [...] The main parameters of interest in equation (5) are the elasticities of fuel consumption (𝑒 and 𝑒 ) with respect to the real price of fuel (𝑃 ).