An analysis of travel demand in Japan's intercity market: Empirical estimation and policy simulation

This study estimates a travel demand model in Japan's intercity market with aggregate OD data. The estimated model is used to estimate the effects of introducing super high-speed-rail (HSR), and alternative levels of CO ₂ emission taxation on the demands for airline and HSR modes. It is found that: (a) there is clear product differentiation between air and rail travel; (b) Japanese consumers are sensitive to travel time and frequency; (c) the proposed Tokyo-Osaka HSR services would drive airlines out of the route while stimulating substantial new traffic; and (d) CO₂ taxation would have a moderate impact on modal shift.