The Value of Time in Air Travel: Theory and Evidence,
Abstract
The roles of time and money cost in the demand for air travel are analyzed. The first step is to construct the theory of consumer demand under a time constraint and to deduce its theorems. Then these theorems are applied to air travel through use of a total price demand function. This analysis considers the effects of fare, trip time, airport delay, schedule frequency, trip distance, traveler's wage rates, and non-wage income on the demand for air travel. Many results concerning elasticities are obtained, including a necessary relationship between the time, price, and total price elasticities of demand. Tests of the theorems are performed, the various elasticities are estimates, and the relationship between the elasticities required by the theory is used to obtain an estimate of the value of time in air travel. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 01, 1971
- Accession Number
- AD0725480
Entities
People
- Arthur S. De Vany
Organizations
- Center for Naval Analyses