If we have Travel time and travel cost, under what conditions can they be considered as substitues? Under what conditions can they be considered as complements?
Could you please give example in transportation system?
Thanks.
When commuting to work people choose mode of transportation bases on a combination of time and cost, Public transportation or car pooling is cheaper than driving alone but takes more time, so people can substitute one for the other.
Vacation travel requires time so the more time you have for vacations the more money you will spend on transportation for travel, so time and cost will act as compliments.
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#1 by ChocolateCoveredGoodness on May 22, 2010 - 10:58 pm
In economic terms, ’substitutes’ and ‘complements’ are used when dealing with goods and services only. Since travel time and costs are neither, you’re question is probably in the wrong place.
If you want to expand the definition to mean does more of one thing lead to more or less of the other than maybe we can work that out. Travel time and travel costs would be complements of each other since more of one would mean more of the other (e.g. fuel, food, entertainment, opportunity costs).
References :
#2 by meg on May 22, 2010 - 11:29 pm
When commuting to work people choose mode of transportation bases on a combination of time and cost, Public transportation or car pooling is cheaper than driving alone but takes more time, so people can substitute one for the other.
Vacation travel requires time so the more time you have for vacations the more money you will spend on transportation for travel, so time and cost will act as compliments.
References :