Economics of Transportation

THIS IS ECON of transportation

This week, your group is tasked with building a conceptual model of transportation demand. Specifically, I would like you to outline a conceptual model of demand for a hypothetical luxury bus service between Kearney and Omaha (with one stop in Lincoln). This bus is separate from the Greyhound buses that pass through Kearney. This bus service would start in Kearney, travel to Lincoln (dropping passengers downtown), and then continue on to the Omaha airport. The bus would not make any other stops, so travel time between destinations would be only slightly longer than driving. The bus would be a modern luxury coach with onboard WIFI, comfortable seats, etc.

Your conceptual model should use a variety of independent variables to estimate the total number of weekly passengers on this bus. Therefore, the first step is to list your choices for independent variables that you believe will be useful for predicting weekly ridership. You should list at least 5 independent variables, with at least one being an indicator variable. Then, you should describe how these variables will likely affect weekly ridership. Lastly, comment on how the determinants of demand will affect the feasibility of a private company starting this type of bus service.