Diverted and induced demand: Evidence from the London-Paris passenger market

Abstract

The paper investigates passengers' preferences and demand induction (or reduction) patterns for the London-Paris passenger market. By leveraging an integrated model calibrated on an extensive dataset about passenger flows between London and Paris during the period 2009–2019, we investigate key dimensions by which travelers evaluate transport modes and how both socio-economic characteristics and supply-attribute variations contribute to stimulating or reducing the overall demand. The research confirms the importance of attributes, such as travel times, fares, and frequencies on passenger modal choice, providing some sketches about passengers' propensity toward air or high-speed rail (HSR) mode. Based on data in this study, we find that ceteris paribus a one-trip increase in the daily frequency of Eurostar would stimulate demand for more than 94,500 passengers per year (2.3% of current ridership), while a reduction of HSR travel time by 10 min would increase current flows by at least 1.3%. Analyzing the demand implications of a possible policy of ending air routes for environmental purposes, we prove that the cancellation of air connections would result in a reduction of current demand higher than 6%. HSR service providers could offset the reduction in service levels resulting from air routes closure mainly by leveraging service frequency.