The Effect of Fuel Price on Demands for Road and Rail Travel: An Application to the French Case

This paper analyses the fuel price sensitivity of French traffic. Crucially, it develops the use of innovative econometric models. Partial adjustment models have been selected to represent traffic between 1990 and 2010. The road traffic model includes explanatory variables such as the fuel price, GDP, the length of the motorway network, and a lagged variable of traffic. Furthermore, a rail demand model including fuel price as an explanatory variable is also processed. In the short term, an increase of 10% in fuel price leads to a fall of 1,4% in the road traffic whereas in the long term, it leads to a fall of 2,8%.