I am currently writing a Revision Guide for OCR Economics A Level. For this, I’ve been doing some research into transport markets.
Three interesting graphs from Social Trends vol 40.
Cost of Rail Travel
Interesting to note that the cost of train and buses has increased much faster than overall cost of using cars (this overall cost includes MOT, Purchase, tax, petrol, running costs e.t.c.). The figures go until 2009, so don’t include recent surge in price of petrol. But, it shows that the growth in rail travel has occured despite rising prices.
Why Has Demand for Train Travel Increased Despite Higher Prices?
Time is Money. On many journeys, increased road congestion has led to longer journey times in the car. On the other hand rail journeys have been improved by electrification of some lines and improved signalling. Therefore, the shorter journey time has made it relatively more attractive.
Parking Restrictions in City Centres. Parking restrictions in many cities make trains more effective as you don’t have to worry about parking. It is perhaps no coincidence 70% of train journey begin or end in London. The city with the worst congestion and best rail links.
Income Elastic Demand. Rising incomes have led to a bigger % rise in demand for trains. From the train travel statistics you can spot the two periods of recession in the early 1980s and early 1990s. (though the current recession didn’t cause a fall in demand for rail travel as rising oil prices, encouraged more people to go by train)
Improve Service Reliability. A combination of privatisation and better technology has led to more reliable trains and better quality. (At least according to Railtrack)
New Technology Age. In the age of the laptop, a train can be effectively a mobile office. If you commute by train, you make more efficient use of times.
Rail, Light Rail and London Underground.
If you look at statistics for London Underground and light rail (e.g. Manchester) the statistics are more impressive.
Source: ONS Social trends