Empirical Estimation of Price Elasticity of Demand For Transportation: The Case of Klang Valley (Malaysia)
Even though the investments in transportation are significantly increasing, the impact of public policies on public transportation is relatively unavailing. The city of Kuala Lumpur is still competing with high number of private vehicle users which result in every day car congestions and heavy air pollution. This article attempts to find possible strategies that can be adopted by local authorities in order to restrain the private vehicle users. Since the Malaysian government has recently taken certain steps which elicited overall transportation costs increases, our aim is to evaluate whether the extent of the policies would bring the desired outcomes in form of traffic reduction. Empirical analysis is based on price elasticity calculations capturing the reaction to a hypothetical percentage increase in maintenance, parking and toll costs. The survey also estimated a price elasticity of the public transportation customers and investigated the socio demographic characteristics of all transportation users in the Klang Valley area. With respect to the survey findings we proposed several policies which can reduce private vehicle utilization and lower the traffic congestion in the city.
Index Termsó Consumer survey, Ordered logit model, Price elasticity, Public transportation in Klang Valley.