Forecasting demand in transport
Good forecasts of the demand for different modes and categories of transport are a fundamental requirement for efficient investment in transport infrastructure.
We have strong expertise in the statistical and econometric modelling of transport demand. We have studied the factors that drive transport demand, and have investigated the recent changes in the linkage between economic activity and the demand for different categories of transport.
We use our advanced modelling skills to assist clients in evaluating the quality of transport demand forecasts and assessing the uncertainty inherent in the forecasts.
Did you know that, on average, actual traffic volumes for recent Australian toll roads were 45% below the forecast levels?
(based on a 2010 study by Li and Hensher)
Inaccurate forecasts can be caused by misrepresenting how road users actually make travel choices. A well-specified demand model considers commuters’ willingness to pay and the impact of changes in travel costs. This requires consideration of vehicle-related costs, costs of alternatives and commuters’ valuations of travel time, safety, comfort or reliability improvements. Frontier Economics can develop bespoke models of demand or validate existing models to ensure key economic inputs are appropriately considered.