Journal of Engineering, Project, and Production Management, 2015, 5(1), 13-25

Price Elasticity of Demand and Capacity-Restraint Transit Fare Strategy: A Case Study of  Bangkok Mass Transit System

Ackchai Sirikijpanichkul¹ and Sarintorn Winyoopadit²

¹Lecturer, Faculty of Engineering, Kasetsart University, 50 Ngam Wong Wan Road, Ladyaow, Chatuchak, Bangkok, Thailand, 10900. E-mail: fengacs@ku.ac.th (corresponding author).

Engineering Management

Received February 2, 2014; received revision March 31, 2014; accepted April 8, 2014

Abstract: Traffic congestion is a chronic problem of Bangkok. Similar to other metropolises, the city perpetually seeks for alternatives to road travel. Mass rapid transit seems to be the only way out that is expected to mitigate traffic congestion in the city. However, without common fare system, travelers need to pay an initial entrance fee every time they enter each transit system. This excess cost tapers the demand and affects the efficient use of the system. This research investigates the influence of fare price on transit use which is measured by price elasticity of demand and proposes the optimum fare price if the common fare is used. The analysis is based on the findings from the stated preference survey techniques. Finally, the conclusion on fare level that encourage more patronage, maintain service quality and operator revenue is addressed.

Keywords: Price elasticity of demand, capacity-restraint, transit fare strategy.

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Citation: Sirikijpanichkul, A. and Winyoopadit, S. (2015). Price Elasticity of Demand and Capacity-Restraint Transit Fare Strategy: A Case Study of Bangkok Mass Transit System. Journal of Engineering, Project, and Production Management, 5(1), 13-25.

DOI: 10.32738/JEPPM.201501.0003

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