Analysis of Passenger Transportation Demand: Case Study of the Customs House, the Thai-Laos Friendship Bridge, Nong Khai Province

Sakkarin Nonthapot, Thanet Wattanakul
(Faculty of Integrated Social Sciences, School of Economics, Khon Kaen University, Nong Khai Campus, Thailand)

Abstract: This study analyses the factors influencing passenger transportation demand at the Thai-Laos Friendship Bridge in Nong Khai Province, Thailand, and proposes the policy recommendations in order to enhance the efficiency and performance development of the passenger transportation system. Secondary data was collected from July 2007 to June 2010. The passenger transportation demand model estimation via a unit root test prior to the ordinary least square (OLS) technique found that the passenger number has a long-term, positive equilibrium relationship with the price. On the other hand, gross domestic product (GDP) and the frequency of services provided, have a negative relationship with the exchange rate. The empirical results of a short term analysis based on the error correction mechanism (ECM) estimation revealed that the adjustment speed that affects the number of passengers deviates from the equilibrium point to the long-term equilibrium point by 46.3 percent in each time period. Proposed policy recommendations are as follows: entrepreneurs should increase the frequency and number of services; wider variety of vehicles should be provided; each vehicle should run at full capacity; overall improvement in speed, safety and efficiency of the services is also necessary. According to the findings, it can be confirmed that passenger income and the frequency of services are important factors determining the number of passengers. Moreover, an improvement of service quality and increasing efficiency by entrepreneurs will lead to tourism and investment promotion between both countries.

Key words: passenger transportation demand; the Thai-Loas friendship bridge

JEL codes: F15, F20, F23