Trends in Income and Price Elasticities of Transport Demand (1850-2010)

The research finds that income and price elasticities for passenger transport in the UK were very high in the mid-nineteenth century and have declined continuously, with land transport becoming price inelastic in the 1920s and income inelastic by the early 1940s. Technological transitions, specifically the introduction of cars and airplanes, are found to have delayed the decline of these elasticities by providing higher quality services. The author argues that while future energy transitions in land transport are unlikely to cause the dramatic energy consumption spikes seen in the nineteenth century, they may still shift energy use trends upward, suggesting that carbon pricing should focus on encouraging low-carbon technology rather than reducing overall travel demand.

• Income and price elasticities of passenger transport demand in the United Kingdom were very high in the mid-nineteenth century, with income elasticity at 3.1 and price elasticity at -1.5 in the 1850s, and both have declined since then.
• By 2010, the long-run income and price elasticities for aggregate land transport demand had fallen to 0.8 and -0.6, respectively.
• Land transport demand became price inelastic (less than one) in the early 1920s and income inelastic (less than one) by the end of the 1930s and early 1940s.
• The introduction of air travel delayed the decline of income elasticity for total passenger transport by approximately sixty years, keeping it around 1.2 between the 1920s and 1980s.
• Energy and technological transitions, such as the development of the car and airplane, delayed the declining trends in income and price elasticities by offering higher quality services.
• The study estimates a substantial rebound effect for aggregate transport demand, suggesting that a 10% increase in fuel efficiency may lead to a 6% increase in travel, resulting in only a 4% energy saving.
• Because of the long-term decline in elasticities, future energy and technological transitions are unlikely to produce the same growth rates in energy consumption as those seen during the nineteenth-century transitions.
• The low price elasticity of land transport in industrialised countries suggests that carbon pricing or taxes will be more effective at encouraging a shift to low-carbon energy sources and technologies than at reducing overall travel demand.

APA

Fouquet, R. (2012). Trends in Income and Price Elasticities of Transport Demand (1850-2010). Basque Centre for Climate Change. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20120224121632501672561.pdf

Chicago

Fouquet, Roger. Trends in Income and Price Elasticities of Transport Demand (1850-2010). Basque Centre for Climate Change, 2012. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20120224121632501672561.pdf.

Wikipedia

{{cite report |last1=Fouquet |first1=Roger |title=Trends in Income and Price Elasticities of Transport Demand (1850-2010) |publisher=Basque Centre for Climate Change |date=February 2012 |url=https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20120224121632501672561.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fouquet2012trends, author = {Fouquet, Roger}, title = {{Trends in Income and Price Elasticities of Transport Demand (1850-2010)}}, institution = {Basque Centre for Climate Change}, year = {2012}, month = feb, url = {https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20120224121632501672561.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }