Estimate of The Impact on Emissions of a Reduction in Air Passenger Duty in Scotland
|Aviation Price Elasticity of Demand||Elasticities||UK aviation forecasts paper (January 2013). Categories used shown in the DfT paper Table A25|
|UK Passenger Numbers and Destination||
|CAA data is available, by destination. This can be mapped onto HMRC APD Bands|
|Scottish Passenger Numbers and Destination||STS||CAA data for Scotland is published in Scottish Transport Statistics|
|Ticket Prices 2009||CPI||There is no available 2009 price data so it has been deflated using the CPIH Table 25 Index L54F|
|Ticket Prices 2013||Prices||Estimate of average annual return price for 1 adult to popular destinations from the UK.|
|Aviation Emissions||GHG emissions||Taken from the National Inventory database|
Price Elasticity of Demand
There are numerous ways to generate price elastic of demand values. Often these take a grouping approach such as European, North American, EU or OECD over a country specific set of estimates. Further disaggregation into leisure or business travel or domestic, short or long haul often doesn't get included at this regional level either. Instead the focus is on an overall price elasticity of demand.
At individual country level analysis this further disaggregation is often present and this is the case with the UK data. The most frequent and comprehensive assessments come from the DfT, with the latest estimates published in January 2013.
UK and Scottish Passenger Numbers
The Civil Aviation Authority provides annual data on passenger numbers broken down by UK airport and destination airport and country. As it is possible to directly map the HMRC APD banding directly across to the country level and airport level data from the CAA it is possible to bring the two datasets together and produce a passenger breakdown by APD band for both the UK and specifically for Scotland.
Airline Ticket Prices
There is no independent publicly available data source for airline ticket prices. That said, there are many price comparison sites so information is available and collectable, albeit it is not possible to be certain about the accuracy and completeness of the data contained within these searches, or the validity of all of the prices quoted. The comparison site used in this analysis provides a monthly average price over a calendar year from which internal analysis has estimated an annual average and the price of a business class ticket relative to this average standard class ticket price. This average ticket price is likely to be un-weighted but the paper carries out some sensitivity analysis around the point average price for each destination in order test the importance of price to the overall outcome.
No data source could be found for 2009 prices so the only possibility available was to deflate the 2013 price. Rather than use the broad measure of CPI the analysis instead uses the sub category 7.3 Transport Services and within that Passenger Transported by Air. This shows that over the last four years prices have increased by 31%. The analysis assumes that this increase takes account of the change in APD as part of this overall change in price recorded in the CPI index.