Testing the stability of travel expenditures in Nigeria

A report is presented on a study carried out to develop a functional form for travel money expenditure in a Nigerian setting, and test its stability against energy policy change, specifically the fuel price increase of October 1994. The Box–Cox transformation regression approach was adopted in the modelling exercise in order to evolve a data-defined functional form and ensure a more rational basis for the stability test. The results of the modelling exercise show that while statistically significant functional forms were estimated for the ‘before’ and ‘after’ fuel price increase periods, the functional forms estimated are not stable across the periods. Thus ‘travel budget’ is as yet not usable as a term for travel expenditures in Nigeria. The implication of this for travel demand modelling in Nigeria is that, at least till other evidences prove otherwise, there is as yet no basis for using the ‘Universal Mechanism Of Travel’ model developed by Zahavi. Of disposable income and total expenditure, the former has proved to be more appropriate for use as ‘available money’ for the estimation of travel expenditures in Nigeria in the ‘before’ energy policy change period, while total expenditure proved appropriate in the ‘after’ period.