Assembly

David Levinson

Induced TravelS1: Supply before

S2: Supply after

Price of Travel

Quantity of Travel (VMT)

Q1 Q2

P1

P2

Demand

Elasticity

• %Change in Demand / % Change in Price

• (Q/Q)/(P/P)• Typically look at a 1% change in

price when measuring change in demand, that is, try to keep it “marginal”.

Understanding Elasticity

Feature  Elastic goods  Inelastic goods PED value  Greater than 1  Less than 1 A rise in price means  A larger fall in demand  A smaller fall in demand Slope of demand curve  Flat  Steep Number of substitutes  Many  Few Type of good  Luxury  Necessity Price of good  Expensive  Cheap Example  Hyundai   Gasoline

Types of Elasticity

• Price Elasticity of Demand (Demand Changes with Price)

• Price Elasticity of Supply (Supply Changes with Price)

• Cross Elasticity of Demand (Demand Changes with Price of Another Good)

• Income Elasticity of Demand (Demand Changes with Income).

How Highway Expansion Effects Travel and Activity

• [Round Robin]• Makes network faster, • Higher attainable speeds lead to time savings

in travel (price)• Increases accessibility• Broadens commuter’s travel choices• More non-travel activities• Individuals maximize their utility

Estimating How Much

• Price Elasticity of Demand• Capacity is surrogate for Time (or

Price)• % Change in Demand / % Change

in Capacity• Or If You Like Calculus e = dQ/dP .

ElasticitiesStudy ElasticityDowling and Colman(1995)

0.3-0.5 % i ncrease in trip generation due to congestionrelieving projects

Fulton et al. (2000) 0.2-0.6% increase in VMT due t o 1% increase in l anemiles

Hansen and Huang(1997) 0.6-0.7% increase in VMT due t o 1% increase in l anemiles (County Level)0.9% increase in VMT due to 1% increase in lane miles(Metropolitan Level)

Noland (1999) 0.2-0.5% increase in VMT due t o 1% increase in l anemiles(Short run estimates)0.7-1.0% increase in VMT due t o 1% increase in l anemiles (Long run estimates)

Strathman et al. (2000) 0.29% direct effect for 1%increase in road capacity0.033% indirect effect for 10% increase in road capacity

Induced Demand: A Microscopic Approach

• Measure Extent of Induced Demand due to Roadway Expansions (Not New Roads)

• Use Data on Twin Cities Links Over 20 Years

Capacity Growth in Twin Cities

Summary of Lane miles

0

500

1000

1500

2000

1976 1980 1984 1988 1992 1996 2000

Year

Lane miles

Interstates Trunk Highways Hennepin County Highways

1995 Road Network Used in Analysis

Interstates Trunk Highways Hennepin CountyHighways (CSAH)

Number oflinks

Total linklength(Kms)

Number oflinks

Total linklength(Kms)

Number oflinks

Total linklength(Kms)

Total 1193 710 2138 1808 1658 1023

Summary of Change in VKT

Summary of ∆VKT (VKTt-VKTt-2)Year Interstates Trunk Highways CSAH

<0 =0 >0 <0 =0 >0 <0 =0 >01998 61 25 1107 403 298 1437 677 78 9031996 176 60 957 475 225 1438 554 127 9771994 198 61 934 587 303 1248 647 173 8381992 231 42 920 450 303 1385 888 160 6101990 181 52 960 562 135 1441 483 142 10331988 186 0 1007 561 75 1502 655 85 9181986 288 22 883 515 101 1522 379 82 11971984 79 8 1103 465 60 1613 464 30 11641982 330 4 859 736 46 1356 709 76 8731980 696 17 480 894 90 1154 769 77 812

Total 2426 291 9210 5648 1636 14096 6225 1030 9325

Model

€

Q = f (ΔQn

,ΔQpn

,ΔLn

,ΔLpn

,ΔPn ,ΔPan

,Qt,Qpt

,Lt,Lpt

,Pt,Pat

,D)

where :

t = base year

ΔQ = Change in VKT on the link between time t + n and t

ΔQn

= Change in VKT on the link between time t and t - n

ΔQpn

= Change in summed VKT on the parallel links between time t and t - n

ΔLn

= Change in the number of lanes on the link between time t and t - n

ΔLpn

= Change in the summed number of lanes on the parallel links between time t and t - n

ΔPn

= Change in the population of the MCD to which the link belongs, between time t and t - n

ΔPan

= Change in the summed population of the adjacent MCDs between time t and t - n

Qt

= VKT in the link at base year t

Qpt

= Summed VKT in the parallel links at base year t

Lt

= Number of lanes in the link at base year t

Lpt

= Summed number of lanes in the parallel links at base year t

Pt

= Population of the MCD to which the link belongs, at base year t

Pat

= Summed population of the adjacent MCDs, at base year t

D = Dummy variable for the base years

n = lag year = 2, 4, 6, 8

Dependent variable = Change in VKT between t+n and t(∆Q)

Variable [(t)-(t-n)] Hypothesis Summary Cases

Change in lanes on the link (∆Ln) + S +S 8/12

Number of lanes on the link in base year t (Lt) -S 6/12

Change in VKT on the link (∆Qn) + S -S 9/12

VKT on link in base year t (Qt) +S 8/12

Change in lanes on the parallel link (∆Lpn) - S +S 6/12

Number of lanes on the parallel link in base year t

(Lpt)

-S 9/12

Change in VKT on the parallel link (∆Qpn) -S 6/12

VKT on parallel links in base year t (Qpt) +S 8/12

Change in population of the MCD (∆Pn) + S +S 7/12

Population of the MCD at base year t (Pt) - S -S 7/12

Change in the summed population of the adjacent

MCDs (∆Pan)

+ S NS 7/12

Summed population of the adjacent MCDs at base

year t(Pat)

- S -S 11/12

Estimated Elasticities

Model Interstates Trunk Highways Hennepin County

Highways (CSAH)

2- year lag model Not Significant -.044 .045

4- year lag model -.143 .309 .148

6- year lag model .214 .195 .361

8- year lag model .565 Not Significant .422

ImplicationsIncrease in highway capacity has a small

but significant impact on individual’s activity and travel patterns

Expansion of Roadways does induced some additional demand, but the elasticity is < 1

New Construction has larger effectsEffect on Workers and Non-Workers are

different

Time Spent at Activities Increases

S1 S2

U

+ve

AS1 AS2

TS1

TS2

Time Spent

Traveling Decreases

Travel Time (T)

Activity Duration (A)

1440 minutes

1440 minutes

Utility Increases with Expansion

Fixed Daily Time Budget

“Demand” Line

Travel and Activity Duration Production Function

Data

• 1990/91 and 1995/96 Nationwide Personal Transportation Survey

• 1990 and 1995 Federal Highway Administration Highway Statistics

• Individuals whose total activities did not add to 1440 minutes (24 hrs), excluded

• This study looks only at adults, 18-65 years of age

• Excluded travelers with a daily shopping time greater than 420 minutes

Description of Variables

T90i Time spent at activity "i" in 1990

i Index of activities (travel to and duration at home, work, shop and other)

A Age

D Local population Density

G Gender

H Household Income levels

L Family lifecycle characteristics

M Month of year interview was conducted

S State specific variables

W Day of week interview was conducted

Methodology

• Since the NPTS was not conducted as a panel survey, we first estimate a model of 1990 individuals, and then apply that model to 1995 individuals in the form

T90i = f(A,D,G,H,L,M,S,W)• Estimated Travel Behavior for 1990 individuals can be determined in the form

^

T90i = f(A,D,G,H,L,M,S,W)95

• Then we estimated a difference model of change in travel behavior between the 1995 individuals their best estimate of 1990 behavior

Difference ModelDifference Model

C Difference in lane miles for all roadway types between 1995 and 1990

C90 Sum of lane miles for all roadway type in 1990

Δ F Difference in state average Fuel prices between 1995 and 1990

F90 State average Fuel price 1990

Δ I Difference in state average per capita Income between 1995 and 1990

I90 State level per capita Income in 1990

Δ P Difference in state Population between 1995 and 1990

P90 State Population in 1990

D95 Local population Density estimates in 1995

G95 Individual’s sex in 1995

L95 Family Lifecycle characteristics in 1995

Δ iT = 95iT −^

T90i change in time at activity "i" between 1995 and 1990 (estimated)

€

iT = f (ΔC /C90,ΔF /F90,ΔI /I90,ΔP /P90,D95,G95,L95)

s.t. Δ iTi=1

8

∑ =0

Hypothesis for Workers

TRAVEL TO TIME SPENT AT

H W S O

- - - -

TimeSavings

From Travel

FasterNetwork

TimeSavings

From Travel

H W SO

- -+ +

ReducedPeak

Spreading

Big BoxStores

PleasureOriented

TimeSavings

From Travel

Hypothesis for Non Workers

TRAVEL TO TIME SPENT AT

H S O

+ + -

More # of Home-Shop

Trips

FasterNetwork

H SO

++ -

LessDiscretionary

PleasureOriented

Elasticity of Time with respect to Elasticity of Time with respect to CapacityCapacity

* Indicates significance at 95% confidence level

Dependent variableChange in Minutes MinutesTravel time to

Home -3.17E-04 -1.08E-02 1.48E-02 * 5.28E-01Work -7.06E-03 * -1.23E-01 - -Shop -4.71E-02 * -1.90E-01 3.39E-02 * 2.35E-01Other -9.80E-03 * -1.60E-01 -2.91E-02 * -6.06E-01Time Spent atHome 7.27E-03 * 6.56E+00 2.19E-03 * 2.60E+00Work -1.80E-02 * -5.66E+00 - -Shop -3.44E-02 * -7.67E-01 2.54E-02 * 1.19E+00Other 2.72E-03 3.49E-01 -2.83E-02 * -3.95E+00

Non-workers Workers

%elasticities %elasticities

ResultsDue to Highway Capacity Expansion• Workers spend more Time at Home and

Other, Less Time at Work and Shop• Non-Workers spend more Time at Home

and Other, Less Time at Other• Non-workers take more Home to Shop

trips

Questions?