Price & Income Elasticities of Demand
Elasticity can be defined as a change in traffic resulting from a change in an identified causal variable .
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- Price and Income elasticities of demand are defined based on changes to GDP and / or prices
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- As per a recent NCEAR study..
- The estimate for income elasticity is 1.1
- The estimate for price elasticity is -0.6
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- Elasticity of income plays a higher role in air traffic demand as compared to price