Passenger rail demand in Perth: a time series analysis

Several major cities in Australia have recorded an unexpected growth in passenger rail demand in recent years. This paper uses annual data from the 1983‐2008 period, together with modern time series econometrics methods, to examine empirically the factors potentially contributing to growth in passenger rail demand in Perth, Australia. A cointegration approach is used to estimate long‐run passenger rail elasticities and an error correction model is employed to estimate the short‐run elasticities. As far as fare elasticity is concerned, a 10‐ percent cut in the fare increases boardings by about 8 percent in the long ru,n and 7.6 percent in the short run. It also finds that the population exerts a significantly positive impact on demand. Since Perth’s population, and that of surrounding local government areas, has been expanding, this implies that there will be a rising demand for rail services. In addition to the fare and population, rail kilometres operated and commuter perceptions are the other two most significant variables affecting demand in Perth.