Study on sound management of Standard Gauge Railway in Kenya through demand elasticity analyzing
Date
2023
Authors
Yang, Y.
Journal Title
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Volume Title
Publisher
Strathmore University
Abstract
Railway is intuitively more of competitive advantage in long haulage and mass carrying by decreasing the cost of factors of production, and optimizing goods distribution channel. For the purpose of sound management within railway industry, the demand elasticities of SGR in Kenya are taken into assessment. Time series data in monthly interval was procured from 2017 to 2021. The sensitivities of SGR demand to critical elements are determined by econometric approaches. Within the scenario of passenger, the demand is expressed by fare, GDP per capita and fuel price. None stationary data was analyzed by Autoregressive Lag Distribution, in the long run, elasticity to fair is elastic at -2.6, elasticity to GDP per capita is 4.2, and elasticity to other road mode is -4.2. Results show that passenger demand has positive relation with GDP, while modal competition advantage to other road mode is not significant. Within the scenario of freight, volume moved is expressed by freight charge, international trade, GDP in transport sector, and fuel price. Stationary data was evaluated by Johansen co-integration approach. In the long run, elasticity to charge is 0.4, to GDP and international trade are 1.0 and 1.63 respectively, to other road modes is 2.6. Findings imply that price increase can raise the revenue, freight volume is positively affected by GDP and international trade, and mode shift to other road mode is also not significant. In the short run, any disequilibrium will be adjusted with a speed at 0.47. Therefore, the price framing policy can be employed to increase the revenue in freight sector solely, while subtler works should have been done, which may lead to competitive advantage for both passenger and freight sectors.
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Full- text thesis
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Citation
Yang, Y. (2023). Study on sound management of Standard Gauge Railway in Kenya through demand elasticity analyzing [Strathmore University]. http://hdl.handle.net/11071/13402