What are Demand Elasticities?
Chapter 3 provides definitions for different categories of demand elasticities and discusses how each can be interpreted. It outlines three key concepts: price elasticity of demand, cross-price elasticity of demand and income elasticity of demand. It also discusses key factors that influence both the demand for air transport and the sensitivity of this demand to changes in prices and incomes.
How can this be applied to air travel demand?
Chapter 4 discusses the different types of demand elasticity that can be estimated for air travel. It discusses how the relevant demand elasticity can change in relation to the market size and its geographical location.