DP7462 The Fundamental Law of Road Congestion: Evidence from US cities

Author(s): Gilles Duranton, Matthew A Turner
Publication Date: September 2009
Keyword(s): congestion, highways, public transport, vehicle-kilometers traveled
JEL(s): L91, R41
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7462

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.