Road Expansion, Urban Growth, and Induced Travel: A Path Analysis

Claims that roadway investments spur new travel and thus fail to relieve traffic congestion, known as induced demand, have thwarted road development in both the United States and abroad. Most past studies point to a significant induced demand effect. This research challenges past results by employing a path model to causally sort out the links between freeway investments and traffic increases, using data for 24 California freeway projects across 15 years. Traffic increases are explained in terms of both faster travel speeds and land-use shifts that occur in response to adding freeway lanes. While the path model confirms the presence of induced travel in both the short-and longer-run, estimated elasticities are generally lower than those of earlier studies. This research also reveals significant " induced growth " and " induced investment " effects – real-estate development has gravitated to improved freeway corridors and road investments have been shaped by traffic trends in California. Fighting road projects on the grounds of induced-demand should be carefully considered. Energies might be better directed at curbing mis-pricing in the highway sector and managing land-use changes spawn by road investments. Few issues in the urban transportation field have sparked as much controversy and threatened proposed road projects as claims of " induced demand ". For decades, highway critics have charged that building new roads or expanding existing ones to relieve traffic congestion is a futile exercise. Improved roads simply spur additional travel or divert trips from parallel routes, quickly returning a facility to its original congested condition. Traffic is thought to behave more like a gas than a liquid – it expands to fill available space. Regional transportation plans, such as in the San Francisco Bay Area, have been mired in legal and political squabbles on the very grounds that they failed to account for the possibility that new roads might induce sprawl and the extra trips associated with it. Claims of induced demand have spawned such clichés as " build it and they will come " and " you can't pave our way out of traffic congestion ". The preponderance of empirical evidence to date suggests that induced effects are substantial. A widely cited study by Hansen and Huang (1997), based on 18 years of data from 14 California metropolitan areas, found every 10 percent increase in lane miles was associated with a 9 percent increase in vehicle miles traveled (VMT) four years after …