Regarding price elasticities, our review confirm the well-known result that growth in fuel prices has a much stronger influence on fuel consumption than on the number of kilometres driven. car trips are also much less responsive to fuel price changes in long run than car-km , due perhaps to adaptations in mode choice , destination choice and land-use location people make less trip , but travel much shorter distances. the car ownership elasticities with respect to cost also indicate that in the long run consumers do respond to price changes.
However , what is also interesting in table 8 is the relative magnitude of road traffic-related price and income effects. income elasticities of fuel demand are of greater magnitude in both the short and long run than the price effect this is also true of the elasticities of car-km with respect to fuel price and income. the indication may be that even to stabilize traffic and fuel consumption at present levels prices would have to rise faster than income . however , the offsetting factor may be , as mentioned above , the increase in value of time. Further research is required to uncover the exact nature of this effect
finally, from table 8 , our review has emphasized elasticities of demend for freight services. it has also been shown that a great deal of variation exists in the magnitude of estimates reported in the literature and that ther are a whole range of factor that have a bearing on this , including the levels of aggregation, the methodological approach and the specific demand context. nevertheless, we are confident that from the studies reviewed, which span a variety of different commodities and countries , the price elasticity of demand for freight is negative and relatively elastic.
7.Conclusion
this paper has provided a brief review of road traffic and fuel demand elasticity estimates from the international literature. an indication has been given of the orders of magnitude of these effects and the factors underpinning variation in estimates have been emphasized . a range of different elasticity estimates of relevance to road traffic has also been reported. by collating and comparing these estimates , some important impolications have been draw out and some factors underpinning the determinants of road traffic demand emphasized.