Working Papers in Economics,
University of Gothenburg, Department of Economics

Abstract: Using a stated preference survey on business passengers travelling with rail or air between the two largest cities in Sweden, we investigate business passengers' preferences for different modes of transport and their corresponding attributes. We explore the usefulness of a more flexible specification of the demand for transport by using a random parameter logit (RPL) model. In the paper we find that there is a gain in using an RPL model compared to a fixed effect model, in the sense that it provides richer information about the passengers' preferences. However, we also find that the valuation of attributes does not significantly differ between a standard logit and an RPL model. Compared to what previous studies have found, the values put on attributes are very high, this including the environmental impact of the modes. This is largely explained by the fact that business passengers do not bear the cost of the trip, but still have the possibility if deciding mode of transport.

Keywords: Business passengers; Intercity transport; Random parameter logit

JEL-codes: C25; R41

24 pages, March 31, 1999

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Published as

Fredrik Carlsson, (2003), 'The Demand for Intercity Public Transport: The Case of Business Passengers', Applied Economics, vol 35, pages 41-50

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