Questions
• Who, what, where, when, why, how?
Demand Theory
David Levinson
Answers
• What are the answers to those questions a
function of?
• Cost: Money, Time spent on the trip,
• Cost: Money and Time of alternatives.
• Benefit (utility) of trip (e.g. the activity at the
destination)
• Benefit of alternatives
Derived Demand
• What happens if we change
• It is often said that “travel is a derived
demand”. There would be no travel but for
the activities being undertaken at the trip
ends. Travel is seldom consumed for its
own sake, the occasional “Sunday Drive” or
walk in the park excepted.
• Who is traveling or what is being shipped?
• Where are the origin and destination of those trips,
shipments?
• When do those trips begin and end (how long do
they take, how far away are the trip ends)?
• Why are the trips being made, what is their purpose?
• How are the trips getting there, what routes or
modes are they taking?
Rationale
• Why do we want to understand those questions:
• How much “induced demand” will be generated if a roadway
is expanded?
• How many passengers will be lost if bus services are cut back?
• How many people will be “priced off” if tolls are
implemented?
• How much traffic will a new development generate?
• How much demand will I lose if I raise shipping costs to my
customers?
Budgets
• On the other hand, there seems to be some innate
need for people to get out of the house, a 20-30
minute separation between the home and
workplace is common, and 60 - 90 minutes of
travel per day total is common, even for
nonworkers.
• What we know:
• The more expensive something is, the less of it that will be
consumed. E.g. if gas taxes were doubled there will be less
vehicle miles traveled overall.
• Similarly, the longer it takes to get from A to B, the less likely
it is that people will go from A to B.
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 Demand
• All this means is that
we are dealing with a
downward sloping
demand curve: The Demand for Travel
Demand when competitors
Money, Time Price is higher, or
complements price is lower
Demand
0
Quantity
The Shape
• What we need to estimate is the shape of
demand (is it linear or curved, convex or
concave, what function best describes it),
the sensitivity of demand for a particular
thing (a mode, an origin destination pair, a
link, a time of day) to price and time
(elasticity) in the short run and the long run.
ITE Trip Generation
Rates
• Trip Generation - Estimates the number of trips entering or
exiting a site at a given time (sometimes the number
entering and exiting combined is estimated). ITE Rates are
functions of type of development, and square footage,
number of gas pumps, number of dwelling units, or other
standard measurable things, usually produced in site plans.
They are typically of the form Trips = a + b * Area OR
Trips = a + b ln (Area). They do not consider location,
competitors, complements, the cost of transportation, or
many other obviously likely important factors. They are
often estimated based on very few observations (a non-
statistically significant sample). Unfortunately, many
localities require their use.
Induced Demand
Induced Demand
Money, Time Cost before
Cost after
Demand
0 Qb Qa
Quantity
Measurement
• Are the choices continuous (the number of miles
driven) or discrete (car vs. bus)?
• Are we treating demand as an absolute or a
probability?
• Does the probability apply to individuals
(disaggregate) or the population as a whole
(aggregate)?
• What is the trade-off between money and time?
• What are the effects on demand for a thing as a
function of the time and money costs of competitive
or complementary choices (cross elasticity).
Urban Transportation
Planning Models
• Trip Generation - Estimates the number of trips being
produced or attracted to a traffic zone by purpose of trip,
as a function of the number of households, dwelling unit
type, age of occupants, income, and other easily gathered
demographic data, or number of employees by type of
employer (office, retail, industrial, other). Purpose can be
thought of as a matrix of origin and destination activities,
where the less frequent activity pairs (trip purposes) are
often aggregated. Trip rates are rarely a function of
aggregate accessibility (a function of the money and time
cost to reach destinations) ... and even so, are fairly
insensitive to it. In general, activities will be pursued, it is
how, when, and where they are pursued which is sensitive
to money and time prices.
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 Urban Models:
Matrix of Interchanges
Techniques
• Aggregate Demand Models
• Discrete Choice Models
Matrix of Activity Interchanges
Home Work Shop School Other
Home
Work
Shop
School
Other

Prediction Aims Trip Generation

• On Urban Passenger Side Trying to Predict: Trip Generation
– Trips by Origin Activity,
– Destination Activity,
– Origin Zone, Trip Distribution
– Destination Zone,
– Mode,
– Time of Day, and Mode Choice
– Route
• Multidimensional problem. Route Assignment

What Affects Trip

Trips at Home End
Generation?
• Trip Type • Factors • For instance trips produced from or attracted to
– How do we predict how homes in a zone is described as a function of:
– Work to Home
many trips will be produced
unlinked by zone? – Th = f( housing units, household size, age, income,
– Work to Other, Other – Work in pairs, develop a list accessibility, vehicle ownership).
to Home linked of explanatory factors
associated with trip types (i.e.
– Home to Other – [Clearly accessibility and vehicle ownership require knowing something
form hypotheses) . about the network, and so may have to be solved recursively]
– Other to Home
– Other to Other
– Home to Work

3
 Trips at Work End Trips at Shop End
• From or to work: • From or to shop:
– Tw = f ( jobs(square feet of space by type, – Ts = f (number of retails workers, type of retail,
occupancy rate)) square foot, location, competition)

e.g. Demand = Trips/Acre = f(Distance from Center)

e.g. Demand = Trips/Store = f(Retail Type)
Ring Manufacturing Commercial Open Space etc
Trips per Day
0 X1m X1c etc
. . . . Department X
. . . . Stores
7 X7m X7c etc Gasoline Y
Refinery
etc.

PM
Trips by Purpose

Peak Specification
Home-to-Work
2% Period • Home-End Trip
Generation
• Non-Home-End Trip
Generation
Other-to-Other
10% Work-to-Home
29%
Trips – Cross-classification model:
– The dependent variable is trips per
– The trip generation rates for
both “work” and “other” trip

By person. ends were developed using

Other-to-Home Ordinary Least Squares (OLS)
20%
– The independent variables are relating trips to employment by
dwelling type (single or multiple
Purpo family), household size (1, 2, 3, 4,
or 5+ persons per household), and
type and population
characteristics. The variables
used in estimating trip rates for
Work-to- person age.

Home-to-Other
Other(link)
12%
se (DC – Figure 1 shows a typical example of
how trips vary by age, in this case
the work-end are Employment
in Offices (OFFEMP), Retail
(RETEMP), and Other
15% Other-to-
Home(link)
12%
1988) for work to home trips, for three
person households, in both single-
family and multi-family residence
(OTHEMP).

types.
–

Trips By Age Non-Home Trip

1.00
Trip Generation by Age Cohort
Work to Home Trips, 3 Person Households
Generation
0.90
• A typical form of the equation can be expressed as:
Ti = B 1 x OFFEMP i + B 2 x RETEMP i + B 3 x OTHEMP i
0.80

• Where:
0.70

– Ti - Person trips attracted per worker in the ith zone

0.60
– OFFEMP i - office employment in the ith zone
Trips per Person

Single Family Dwelling

0.50
Multiple Family Dwelling – RETEMP i - retail employment in the ith zone
0.40 – OTHEMP i - other employment in the ith zone
– B1,B 2,B3 - model coefficients
0.30

0.20

0.10

0.00
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 85+
Age Cohort

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Purpose Variable Trip
Rate
T-Stat.

Work
Purpose Variable Trip
Rate
T-Stat. Non-
Work
Work to Home
Other to Home(linked) POP 0.032 3.260
(Origin End) OFFEMP
OTHEMP
0.500
0.355
22.4
4.0 Trip (Origin End) RETEMP 0.485 5.040

Home to Work (unlinked)

RETEMP 0.094 0.5

Rates Home to Other (unlinked)

Trip
(Destination End) OFFEMP
OTHEMP
0.003
0.007
1.1
0.5
(Non-
(DestinationEnd) RETEMP
POP
0.215
0.103
1.830
7.490
Rates
(Non-
RETEMP 0.135 4.6

Work to Other (linked)

(Origin End) OFFEMP 0.193 20.1 Home Other to Home (unlinked)

OTHEMP
RETEMP
0.156
0.011
4.0
0.1
End)
(Origin End) RETEMP
POP
0.224
0.135
1.930
10.520 Home
Work to Other (linked)

(Destination End) POP 0.031 3.2 Other to Other (unlinked) End)

RETEMP 0.557 6.0 (Both Ends) RETEMP 0.198 4.410
POP 0.050 10.750

Activity Analysis Como Case

Frequency- How many times the trip is made per day
Scheduling-the order in which the trip s are made
• [See Handout]
Activ ities-home, work, shop other (Non-Discretionary).
• Schools, church, visit friends, recreation, visit doctor (Discretionary).
Patterns – HWH, HWSH, and HWHSH.
• These are a function of sex, age, employment, status, income, auto availability.
• Important things to note in household study are the household size (more predictable),
household structure (less predictable).
• Location/accessibility studies involve feedback.
• Dwelling unit types are obtained from the land use pattern and are an indicator of the
income, race, household structure. They are single units and multi-family types.
• Time of day: The time of day can be derived from the pattern and duration of activities.
Scheduling models give the pattern of activities and not how long each activ ity takes place.
• In a trip generation framework the peak hour factor used is a constant and is a function of
congestion.