Demand Elasticities: An Economic Analysis of Public Transport in the Guadalajara Metropolitan Area

Abstract

This article analyzes the demand elasticities of conventional public transportation in the Metropolitan Area of Guadalajara (AMG). The study focuses on how fare variations affect service usage and generated revenues, providing an analytical framework for decision-making in the sector. Demand elasticity measures the sensitivity of the quantity demanded to price changes, a crucial concept for formulating fare policies that balance revenue generation with system accessibility and equity. Relevant economic laws, such as increasing and decreasing returns, are reviewed, and an analysis of previous studies on public transportation in similar contexts is presented. The central research question is: How do fare variations in conventional public transportation in the AMG affect the quantity demanded and service revenues? The general objective of the study is to assess the price elasticity of demand for public transportation in the AMG to formulate recommendations for efficient and equitable fare policies. The results indicate that demand is generally elastic, suggesting that users are sensitive to fare changes. The article concludes with recommendations to improve the economic sustainability and accessibility of the public transportation service.