Frontier Economics was engaged by the NZ Transport Agency to assist in identifying a 'best fit' methodology for assessing the historical relationship in New Zealand between: 1) economic activity and road freight activity; and 2) income growth and passenger vehicle travel. The Transport Agency would like to use these models to develop long-term road transport forecasts.
The present report represents an initial step in this modelling exercise. The objective was to inform the development of demand models by exploring both data availability and analytical steps that should be considered when developing demand models. The actual development of the models and the estimation of the key parameters are outside the scope and will be undertaken under a separate research project.
The findings, mainly based on literature reviews, are organised in terms of the key analytical steps we recommend the Transport Agency consider when developing the models: data preparation, selection of candidate demand drivers, data investigation and model selection, and model testing and validation.