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Kim, Junghwa. Schmöcker, Jan-Dirk. Li, Yeun-Touh. Demizu, Fumiaki.

6. Discussion and Conclusions

Sustaining demand growth especially for new introduced transportation system has been
becoming an important concern and issue over the world. HSR has been suggested as one
alternative for acquiring sustainability in mobility to car and air travel of the decade.
Moreover, there is no doubt that HSR can promote economic development. In this study we
investigated how to promote HSR sustainably focusing on its long-term demand. Our major
findings are detailed as following.

First of all, with adopting a diffusion modeling in marketing study fields, we identified
that there is diffusion effects on HSR demand and this was different by city. Therefore,
it is suggested that new transport systems could be compared to other new products or
technologies and their market penetration patterns. Secondly, we calculated the impacts of
“innovative diverted demand” and “diverted and induced demand” on HSR demand by city.
It was verified that degree of impacts differed by city. Therefore, one of main conclusion of
this paper can be that the demand growth pattern might be significantly related to urban
regional characteristics. By estimating a fixed effect (FE) one-way error component model,
it was demonstrated that city heterogeneity such as social, economic and geographical
characteristics influence Adoption Effect which explain long-term demand and are a key
factor to promote sustainable transport. Therefore, in order to operate the sustainable HSR
system, it is necessary to understand the characteristics of each city and to establish policy
measures to reflect them. Here, by estimated model, it was presented that accessibility to
the station could be an important element to raise Adoption Effects. Our study implies that
an accessible station is not only likely to generate a large initial demand but also leads to
continuous increase of demand. This we suggest is an important finding. From this result, it
could be implied that it is important to improve the accessibility and psychological distance
to HSR use which citizens have, although geographical and social factors should be taken into
consideration when determining the station location. Therefore, some policy approaches
which forward reducing public’s psychological distance and increasing accessibility to HSR
station should be urged in order to secure to long-term HSR demand.

In addition, we also find that an increase of elderly population would influence on securing
long-term demand of HSR negatively. This finding could be interpreted as “Since the elderly
may not be able to make business trips, the increase of elderly population rate can have a
negative impact on long term demand growth for high-speed railways”. Chen and Haynes
(2015) noted that HSR has been increasingly attractive mode for business traveler who
have a high value of time than other travelers. Our analysis suggests that it is difficult
to “gradually persuade” and to create continuous demand growth among an older, non-
working, population. Especially among an ageing population that dislikes public transport
for various reasons such as fears of safety (Schlag, 2008; Karthaus and Falkenstei, 2016)
it might hence be difficult to create a large demand if the initial acceptance has not been
large. Further research on confirming this is though needed.

More generally, we suggest one implications of our findings is that it illustrates that not
only hard measures such as fare adjustment and network expansions are needed to secure
long term. We might postulate that the coefficient p is also related to advertising effect and
q presents word-of-mouth effect (Mahajan et al., 1995). Therefore, the study results can
be interpreted as showing that marketing strategies to transportation service is possible
for sustainable operation of the transportation system. Indeed, according to Kim (2008),
various marketing strategies to KTX (Korea Train eXpress) have been implemented over
the past several years in order to successfully enter the high-speed railway transportation

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