The long-run behaviour of transport performance in India: A cointegration approach

The long-run behaviour of transport performance in India: A cointegration approach

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Article ID: iaor20021843
Country: United Kingdom
Volume: 35A
Issue: 4
Start Page Number: 309
End Page Number: 320
Publication Date: May 2001
Journal: Transportation Research. Part A, Policy and Practice
Authors:
Keywords: measurement, developing countries
Abstract:

The long-run relationships between variables representing transport performance and other macro-economic variables in India are analysed in this paper using the concepts of cointegration and error correction. The results show that passenger-kilometres (PKM) in India are likely to increase faster than gross domestic product (GDP), and much faster than urbanisation. The tonne-kilometres (TKM) are highly correlated to industrial growth, and are likely to increase faster than the index of industrial production. Both the passenger and freight performances are relatively inelastic to price changes. The error correction model (ECM) shows that both passenger and tonne-kilometres adjust to their respective long-run equilibrium at a moderate rate, with about 35% of adjustment in PKM and 40% of adjustment in TKMs occurring in the first year.

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