3 research outputs found
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Social Norms as a Cost-Effective Measure of Managing Transport Demand: Evidence from an Experiment on the London Underground
In an effort to cope with increasing passenger demand on its network, Transport for London (TfL) implemented in the second half of 2017 an experiment on one of its busiest metro train platforms. The platform surface was painted to highlight the exact location of the train doors once it comes to a full stop and to direct passengers to wait in parts of the platform that would not obstruct passengers from alighting from the train and leaving the platform. We estimate the effect of this intervention to change passenger behaviour on the platform on train waiting and delay times. We use different sets of assumptions about what the counterfactual change in waiting and delay times would have been in the absence of the intervention. Depending on the assumptions, we find that the intervention has reduced train waiting times between 0 and 6.6%. We also find that this reduction came about mainly through reducing delay times of trains once they are delayed which were cut by between 4.6% and 12.6%. The reductions are not evenly distributed throughout the day, but tend to occur during peak traffic hours. The value of the implied time savings per year are £156,000 at a cost of £25,000, amounting to a return of £6 per £1 investment. If the dwell time reduction could increase train frequency on the affected line by 1 train per hour, however, then TfL could save another £3.6 million
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Is the price elasticity of demand asymmetric? Evidence from public transport demand
Demand is frequently found to react differently to price increases than to price decreases. This finding is usually attributed to psychological phenomena such as loss aversion or to the different pace with which price changes become known to potential buyers leading to a kinked demand curve. This kink is often invoked in explaining why prices are sticky, especially in the downward direction. We analyse the presence of and the causes for asymmetric price elasticities of demand for the London Underground. Studying public transport demand offers unique advantages: the service cannot be stored and must be consumed at the point of purchase, and the consumption of public transport cannot be preponed or postponed. During the period that we study some nominal fares on the network have increased while others have decreased, offering a unique opportunity to observe price elasticities for both cases. Comparing changes in price elasticities after a price decrease to changes after a price increase, we find that demand is more sensitive to price increases than to decreases (by 0.5 to 1.0 percentage points). We also find that loss aversion contributes to this asymmetry at least on the intensive margin of transport demand
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The effects of social norms and price changes on public transport demand: empirical evidence from London
Demand for public transport in cities has been and is projected to increase, putting existing transport networks under increasing strain. It is therefore important to investigate different means of managing public transport demand and one of such means is through the price mechanism; policy makers need to know how demand might respond to changes in fares. This thesis begins by first exploring the presence of and the causes for asymmetric price elasticities of demand using transport demand data from London Underground and employing regression methods. This research finds that public transport demand is more sensitive to fare increases than to decreases; this is majorly due to loss aversion, at least on the intensive margin of demand. But how does public transport demand respond to a nominal decrease in fares? This thesis next analyse the effect of a change in the fare structure for bus journeys in London on different demand measures using a regression discontinuity design, following Transport for London‘s implementation of a new bus price policy in September 2016. The analyses show that the policy significantly increased the number of bus trips by 5% and follow-up journeys by 8%. Passenger numbers increased by 4%. The results show that the increase in demand was not only driven by new customers, but also by more intensive demand by existing customers. Price manipulations affect the cost functions of both the transport provider and passengers. This thesis finally proposes an alternative and less costly measure of managing public transport demand. Nudging passengers to behave in certain ways through the creation of a salient social norm has the potential to be a cost-effective mechanism to manage transport demand. Transport for London implemented in 2017 an experiment on one of its busiest metro train platforms. Using Difference-in-Differences method and different sets of assumptions about what the counterfactual change in waiting and delay times would have been in the absence of the intervention, this thesis analyses the effect of such intervention on dwell time and, by extension, the capacity to manage demand