Working Paper: NBER ID: w24469
Authors: Michael L. Anderson; Lucas W. Davis
Abstract: There is a widely-held view that as demand for travel goes up, this decreases not only speed but also the capacity of the road system, a phenomenon known as hypercongestion. We revisit this idea. We propose two empirical tests motivated by previous analytical models of hypercongestion. Our first test uses instrumental variables to empirically isolate the effect of travel demand on highway capacity. Our second test uses an event study analysis to measure changes in highway capacity at the onset of queue formation. We apply these tests to three highway bottlenecks in California for which detailed data on traffic flows and vehicles speeds are available. Neither test shows evidence of a reduction in highway capacity at any site during periods of high demand. Across sites and specifications we have sufficient statistical power to rule out small reductions in highway capacity. This lack of evidence of hypercongestion has important implications for travel supply and demand models and raises questions about highway metering lights and other traffic interventions aimed at regulating demand.
Keywords: hypercongestion; highway capacity; traffic demand; instrumental variables; event study
JEL Codes: C36; H23; R41; R42; R48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased queue length (C69) | highway capacity (R48) |
| travel demand (R41) | highway capacity (R48) |
| queue formation (C69) | highway capacity (R48) |