In spite of evidence to the contrary, there is a common perception inside of academia and out that rail transit is an inferior good. This paper proposes a demand model for radial subway networks utilizing the monocentric city model in order to quantify the income elasticity of demand. This model is tested against extant data from the 2000 Census, and controls for spatial variability, demographic and economic factors, and commuter costs. This paper concludes that while the factors that drive demand vary across urban areas, the results suggest that rail transit may in fact be a normal good.
Asquith, Brian J.
"Income Elasticity of Demand for Large, Modern Rapid Transit Rail Networks,"
Undergraduate Economic Review:
1, Article 20.
Available at: http://digitalcommons.iwu.edu/uer/vol7/iss1/20