I expect that I could hire a good research assistant, and s/he would take only an hour or less to find plenty of studies indicating that the price elasticity of demand for air travel is not zero. They would find instead that as prices drop, the quantity demanded increases; and as prices go up (remember when that happened two years ago?) the quantity demanded drops.
Nevertheless geographers at Exeter University have pronounced that the price elasticity of demand for air travel is zero. Well, not in so many words, but they said the same thing. From the BBC [h/t to Brian Ferguson]:
The government raised air passenger duty in February, and the European Union is set to include aviation in its Emissions Trading Scheme (ETS), which could increase costs further.The customers can afford it, so they won't respond to price increases? That flies in the face of both economics and common sense. Even rich people respond to incentives.
But the Exeter research suggests price hikes would have a minimal impact.
"We found that flying is quite embedded in peoples' lifestyle choices," said Stewart Barr from the university's Department of Geography.
"And it's not people on lower incomes taking these flights, it's middle class people taking more flights to go on city breaks, and they can afford to pay higher prices."
... The findings come from a series of focus groups run in Devon in 2005, and from a prior questionnaire.
And I would not be at all upset if journalists and academics were a bit more skeptical about results from focus groups and questionaires. Invariably people say one thing in focus groups or on questionaires, but then behave quite differently.
If the article hadn't said otherwise, I'd figure these "researchers" were from the department of socionomology.