Estimation of demand functions for services of public railway passenger transportation : evidence from Slovenia

Abstract

The paper deals with the estimation of demand functionsfor services of public railway passenger transportation in thecase of Slovenia. Six demand functions were selected and separatelyinterpreted. The aggregate values of demand elasticitiesreported in this paper suggest that the railway passenger demandis price- and income-inelastic. Coefficients of incomeelasticity below one show that the services of railway passengertransportation in Slovenia can be classified among normalgoods. A hypothetical increase in average real fares leads to apercentage decrease in the number of passengers traveling byrail that is smaller than the percentage increase in fares. The estimatedprice elasticities imply that, in the short run, there is potentialfor improving revenues of the railway operator by increasingaverage real fares.