The Impact of High-Speed Technology on Railway Demand

Public transportation demand has shown a high degree of sensitivity to changes in service quality, especially those changes that result in travel time savings or higher frequency of service. This study estimates an aggregate passenger railway demand function to analyze effects arising from the introduction and use of high-speed technology in European railroads. Two types of high-speed technology are considered: conventional high-speed technology and tilting train technology. Estimates of demand elasticities are reported with respect to price, income, quality of service and a range of exogenous characteristics. The results show that increasing the use of either type of high-speed technology appears to induce small positive effects on demand beyond those obtained from usual traffic density increases on non-high-speed existing technology. Travel time savings from conventional high-speed technology have a larger impact on passenger demand than tilting train technology. The introduction of conventional high-speed technology is associated with an 8% increase in passenger railway demand. However, tilting train and conventional high-speed technology can both be considered good options. Conventional high-speed technology would require significantly higher investments in new lines, but could induce a significant amount of new passenger traffic. Tilting train technology would require less investment, but is not likely to induce new passenger traffic and most demand growth would result from increases in tilting train traffic density.