Measuring Marginal Congestion Costs of Urban Transportation: Do Networks Matter?

In determining the marginal cost of congestion, economists have traditionally relied upon directly measuring traffic congestion on network links, disregarding any “network effects,” since the latter are difficult to estimate. While for simple networks the comparison can be done within a theoretical framework, it is important to know whether such network effects in real large-scale networks are quantitatively significant. In this paper we use a strategic transportation planning model (START) to compare marginal congestion costs computed link-by-link with measures taking into account network effects. We find that while in aggregate network effects are not significant, congestion measured on a single link is a poor predictor of total congestion costs imposed by travel on that link. Also, we analyze the congestion proliferation effect on the network to see how congestion is distributed within an urban area.