MRT3 is the 2nd line to be built of the 5 light rail line planned for Metro Manila. It was projected to ferry some 400,000 to 500,000 passengers daily. Two years after its opening, expected ridership levels are still not met. This is despite the series of fare adjustments implemented by the operator to attract more rail transit patrons. This study seeks to investigate the potential of pricing and transit service quality improvements policies in promoting rail transit usage. Thru a combination of SP and RP data, a mode choice decision model was developed. Thru the model, and individual's probability of choosing MRT3 was determined, upon which the elasticity for logit was computed in order to determine the sensitivity of demand to various varibles significant to their mode choice decision. Elasticity is an expression of demand sensitivity to change in price, with price as the general outlay of resoruces necessary to consume travel. This study found out that Metro Manila's demand for rail has an aggregate fare elasticity of around -0.7071, and the non-rail trip maker's aggregate cross-elasticity to rail is +0.0161. Furthermore, trip makers are found to be more sensitive to change in their travel time than in the same percent change in fare. Segmenting the travel market into groups according to trip purpose, trip length, income and frequency of usage, the study gives the amount that each market segment is willing to pay for additional fare. Beyond the amount given, further increase in fare would result into a significant decline in rail demand.
