The Fundamental Law of Road Congestion

The Fundamental Law of Road Congestion: Evidence from US cities

(47 page pdf, University of Toronto – Department of Economics)

-this paper focuses on the economics of traffic volume and congestion on urban highways with the surprising conclusion that neither increased road capacity nor public transit reduces congestion in the absence of congestion pricing

-additional comments on VKT, transit and air quality impacts from this blog on Sustainable Cities and Transport The 405 and the fundamental law of traffic congestion


“We investigate the relationship between interstate highways and highway vehicle kilometers traveled (vkt) in us cities. We find that vkt increases proportionately to highways and identify three important sources for this extra vkt: an increase in driving by current residents; an increase in transportation intensive production activity; and an inflow of new residents. The provision of public transportation has no impact on vkt. We also estimate the aggregate city level demand for vkt and find it to be very elastic. We conclude that an increased provision of roads or public transit is unlikely to relieve congestion and that the current provision of roads exceeds the optimum given the absence of congestion pricing.”

Key Quotes:

“an average American household spent 161 person minutes per day in a passenger vehicle in 2001. These minutes allowed 134 person km of auto travel at an average speed of 44 km/h“

“These data track several measures of traffic and infrastructure for all metropolitan areas in the continental us.”

“with the increasing certainty of global warming comes the need to manage carbon emissions….road transportation sector accounts for about a third of us carbon emissions from energy use.”

“building roads elicits a large increase in vkt on those roads…. four possible sources of demand for vkt: changes in individual behavior; the migration of people and economic activity, increases in the commercial transportation sector, and diversion of traffic from other roads.”

“our estimates of the demand for vkt indicate that vkt is quite responsive to price… these findings strengthen the case for congestion pricing as a policy response to traffic congestion

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