Bus Patronage in Great Britain: Econometric Analysis

The demand for local bus services in Great Britain was investigated to obtain estimates of fare elasticities for use in policy calculations to project the change in bus patronage nationally as a result of a given average fare change, and to explore possible variation in the elasticity. The estimation of bus fare elasticities was based on annual national and regional aggregate data for the years 1974 to 1996 on bus patronage, fares, and other relevant factors influencing bus use. The estimations used dynamic econometric models relating per capita bus patronage (all journeys) to real per capita income, real bus fares (average revenue per journey), and service level (bus vehicle kilometers). The results indicate that patronage is relatively fare-sensitive, with an elasticity for all Great Britain of −0.4 in the short run and −0.9 in the long run. The evidence suggests that the long-run values are at least twice the short-run elasticities and that the total response takes about 7 years. Indications are that full-fare passengers are less sensitive to fare changes than the average bus passenger. The strong negative relationship between automobile ownership and bus patronage in the long run is confirmed, although the short-run effect is negligible. The cross-elasticity between bus patronage and motoring costs appears to be negligible in the short run and to be about 0.3 to 0.4 in the long run.