Although terms such as “induced demand” and “latent demand” have been used in transportation planning for several decades, the concept of induced demand has not been precisely defined nor has it been translated into an operational form suitable for modeling. This paper defines “induced” as referring to a movement along a travel demand curve, in which the price dimension includes travel time and other user costs. Selecting the relevant demand curve is then an analytic choice. For FHWA’s Highway Economic Requirements System (HERS) model, movement along the within-period, short-run demand curve is referred to as “induced traffic,” while movement along the between-period longrun demand curve constitutes a shift in the short-run demand curve and is referred to as induced demand. The model employs this definition to evaluate highway improvement projects using benefit-cost analysis, incorporating effects of short-run traffic volume on changes in the generalized price, as well as effects of long-run land use and other economic feedback. These features were used in the HERS model to prepare the 1997 “Conditions and Performance” report to Congress.
Get full access to this article
View all access options for this article.
References
1.
SmallK. A.Urban Transportation Economics. Harwood Academic, Chur, United Kingdom, 1992.
2.
SmallK. A., WinstonC., and EvansC. A.. Road Work: A New Highway Pricing and Investment Policy. Brookings, Washington, D.C., 1989.
3.
CamusG., and WeinblattH.. Highway Economic Requirements System: Technical Report, Version 3. Prepared for FHWA. U.S. Department of Transportation, Volpe Center, Cambridge, Mass., March1999.
4.
TaplinJ. H. E.Inferring Ordinary Elasticities from Choice or Mode-Split Elasticities. Journal of Transport Economics and Policy, 1982.
5.
DargayJ. M., and GoodwinP. B.. Evaluation of Consumer Surplus with Dynamic Demand. Journal of Transport Economics and Policy, Vol. 29, No. 2, 1995, pp. 179–193.
6.
MackieP.Induced Traffic and Economic Appraisal. Transportation, Vol. 23, No. 1, 1996, pp. 103–119.
7.
WilliamsH. C. W. L., and YamashitaY.. Travel Demand Forecasts and the Evaluation of Highway Schemes Under Congested Conditions. Journal of Transport Economics and Policy, Vol. 26, No. 3, 1992, pp. 261–282.
8.
CoombeD.Induced Traffic: What Do Transportation Models Tell Us?Transportation, Vol. 23, No. 1, 1996, pp. 83–101.
9.
DeCorla-SouzaP., and CohenH.. Accounting for Induced Travel in Evaluation of Metropolitan Highway Expansion. FHWA, U.S. Department of Transportation, Jan.1998.
10.
DowlingR. G.A Framework for Understanding the Demand-Inducing Effects of Highway Capacity. Dowling Associates, Oakland, Calif., Jan.1994.
11.
HeanueK.Highway Capacity and Induced Travel: Issues, Evidence, and Implication. FHWA, U.S. Department of Transportation, Jan.1997.
12.
HolderR. W., and StoverV. G.. An Evaluation of Induced Traffic on New Highway Facilities. Texas A&M University, College Station, Tex., March1972.
13.
Standing Advisory Committee on Trunk Road Assessment. Trunk Roads and the Generation of Traffic. Department of Transport, London, United Kingdom, Dec.1994.
14.
Cambridge Systematics and JHK Associates. NCHRP Report 8-19: The Relationship of Changes in Urban Highway Supply to Vehicle Miles of Travel. TRB, National Research Council, Washington, D.C., March1979.
15.
Effects of Increased Highway Capacity on Travel Behavior: Literature Review. Prepared for California Air Resources Board. Dowling Associates, Oakland, Calif., July1993.
16.
DowlingR. G., and ColmanS. B.. Effects of Increased Highway Capacity: Results of Household Travel Behavior Survey. In Transportation Research Record 1493, TRB, National Research Council, Washington, D.C., 1995, pp. 143–149.
17.
GoodwinP. B.Extra Traffic Induced by Road Construction. In Infrastructure-Induced Mobility, ECMT Round Table 105. Organization for Economic Cooperation and Development, Paris, France, 1998.
18.
HansenM.Do New Highways Generate Traffic?Access, No. 7, 1995, pp. 16–22.
19.
HansenM., GillenD., DobbinsA., HuangY., and PuvathingalM.. The Air Quality Impacts of Urban Highway Capacity Expansion: Traffic Generation and Land Use Change. Prepared for California Department of Transportation. Institute of Transportation Studies, University of California, Berkeley, Calif., April1993.
20.
KroesE., DalyA., GunnH., and Van der HoornT.. The Opening of the Amsterdam Ring Road. Transportation, Vol. 23, No. 1, 1996, pp. 71–82.
21.
PellsS. R.User Response to New Road Capacity: A Review of Published Evidence, Working Paper 283. Institute for Transport Studies, Leeds, United Kingdom, Nov.1989.
22.
CairnsS., Hass-KlauC., and GoodwinP.. Traffic Impact of Highway Capacity Reductions: Assessment of the Evidence. Prepared for London Transport. Landor, London, United Kingdom, March1998.
23.
BrandD., and BenhamJ. L.. Elasticity-Based Method for Forecasting Travel on Current Urban Transportation Alternatives. In Transportation Research Record, 895, TRB, National Research Council, Washington, D.C., 1982, pp. 32–37.
24.
CohenH. S.Review of Empirical Studies of Induced Traffic. In Special Report 245: Expanding Metropolitan Highways: Implications for Air Quality and Energy Use, TRB, National Research Council, Washington, D.C:, 1995, pp. 295–309.
25.
Infrastructure-Induced Mobility: ECMT Round Table 105. Organization for Economic Cooperation and Development, Paris, France, 1998.
26.
GoodwinP. B.Empirical Evidence on Induced Traffic. Transportation, Vol. 23, No. 1, 1996, pp. 35–54.
27.
GoodwinP. B.A Review of New Demand Elasticities with Special Reference to Short-and Long-Run Effects of Price Changes. Journal of Transport Economics and Policy, Vol. 26, No. 2, 1992, pp. 155–170.
28.
Transportation and Environmental Research and Information Services. Induced Demand, Traffic Diversion v. Generation & Related Issues: Annotated Bibliography. North Carolina State University, Raleigh, N.C., Sept.1996.
