Travel demand has a negative slope in that when the cost associated with moving from one point to another increase, the need to move declines. However, if the cost of moving to the preferred destination is low, more people will travel at the said time or day. The travel demand is impacted by costs, such as pricing, demographics, associated risks, and modes. Therefore, travel demand can be elastic, inelastic, or cross-elastic depending on the cost factor impacting people’s need to move. Elastic demand occurs if a change in associated cost propels a unitary shift in travel consumption. In contrast, inelastic demand in travel manifests when the cost causes a smaller change in consumption. Finally, cross-elastic demand evinces when travel costs using one mode cause people to shift to an alternative model. The extensive analysis of travel costs shows how associated demand can be elastic, inelastic, or cross-elastic.
When a cost associated with travel increases and causes people to move from one point to another less frequently, the travel demand is elastic. For instance, if traveling for leisure purposes begins to be expensive, fewer people will want to visit places for fun purposes ( Litman, 2021) . Suppose many people travel to Hawaii over the Christmas holidays. If plane tickets to Hawaii triple in price, fewer people will want to visit the mentioned place. In contrast, many people travel to work daily by road or plane, and a change in price does not affect consumption significantly. For instance, if people use vehicles to reach their work stations, even if fuel increases, only a few people will prefer to walk or cycle. Therefore, when the cost of travel does not cause a reduction in travelers, then the demand is inelastic ( Beuthe, Jourquin, & Urbain, 2014) . Finally, if the cost of using Uber to work increases and people start shifting to using buses instead, then the travel demand is inelastic. In the case above, Uber prices may have hiked, or it may be riskier to use the mode of transport. People may shift to available substitutes to help them reach their destinations.
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References
Beuthe, M., Jourquin, B., & Urbain, N. (2014). Estimating freight transport price elasticity in multi-mode studies: A review and additional results from a multimodal network model. Transport Reviews , 34 (5), 626-644. https://doi.org/10.1080/01441647.2014.946459
Litman, T. (2021). Understanding transport demands and elasticities. Victoria Transport Policy Institute , 1-78. https://www.vtpi.org/elasticities.pdf
