In each of the five levels of aggregation, different cross-price elasticities exist, reflecting the availability of substitute options. The own price elasticity at one level of aggregation can reflect both the own price and cross price elasticities at other levels of aggregation. The interaction between these effects adds significant complexity to the analysis, requiring clarity on which own price and cross 01 - Air Travel Demand 5
price elasticities were measured and controlled for. For example, an analysis of route-level elasticities which does not control for route substitution effects may be more appropriate for a national-level elasticity.The evidence and discussion provided in this report focuses on the appropriate elasticities for the route, national and supra-national level of aggregation.