Derived Demand for Different Modes of Passenger and Freight Transportation in India with Respect to Increasing Energy Price Levels

This paper brings out the price elasticity estimates of different modes of transportation for both passenger and freight (with aggregate data) and freight segments (with disaggregate data) for the Indian Economy with respect to the increasing energy price levels from 1980-1981 to 2006-2007. With aggregate data own-cross price elasticities of air, rail, road, water, other surface transport and inventory levels were estimated. Since rail and road transportation modes are prominent in freight segment, estimations were made for them with disaggregate data. The tracks the transport mode demand shifts that are taking place owing to increasing energy price. Though the railways occupy a dominant role in the passenger segment, in the freight transport industry, road freight is taking over slowly.