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Induced demand and rebound effects in road transport

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  • Hymel, Kent M.
  • Small, Kenneth A.
  • Dender, Kurt Van

Abstract

This paper analyzes aggregate personal motor-vehicle travel within a simultaneous model of aggregate vehicle travel, fleet size, fuel efficiency, and congestion formation. We measure the impacts of driving costs on congestion, and two other well-known feedback effects affecting motor-vehicle travel: its responses to aggregate road capacity ("induced demand") and to driving costs including those caused by fuel-economy improvements ("rebound effect"). We measure these effects using cross-sectional time series data at the level of US states for 1966 through 2004. Results show that congestion affects the demand for driving negatively, as expected, and more strongly when incomes are higher. We decompose induced demand into effects from increasing overall accessibility of destinations and those from increasing urban capacity, finding the two elasticities close in magnitude and totaling about 0.16, somewhat smaller than most previous estimates. We confirm previous findings that the magnitude of the rebound effect decreases with income and increases with fuel cost, and find also that it increases with the level of congestion.

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Bibliographic Info

Article provided by Elsevier in its journal Transportation Research Part B: Methodological.

Volume (Year): 44 (2010)
Issue (Month): 10 (December)
Pages: 1220-1241

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Handle: RePEc:eee:transb:v:44:y:2010:i:10:p:1220-1241

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Related research

Keywords: Vehicle-miles traveled Congestion Rebound effect Induced demand;

References

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Citations

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Cited by:
  1. Su, Qing, 2011. "Induced motor vehicle travel from improved fuel efficiency and road expansion," Energy Policy, Elsevier, vol. 39(11), pages 7257-7264.
  2. González, Rosa Marina & Marrero, Gustavo A., 2012. "Induced road traffic in Spanish regions: A dynamic panel data model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(3), pages 435-445.
  3. Felix Creutzig & Emily McGlynn & Jan Minx & Ottmar Edenhofer, 2010. "Climate policies for road transport revisited (I): Evaluation of the current framework," Working Papers 1, Department of Climate Change Economics, TU Berlin, revised Dec 2010.
  4. Yu, Biying & Zhang, Junyi & Fujiwara, Akimasa, 2013. "Evaluating the direct and indirect rebound effects in household energy consumption behavior: A case study of Beijing," Energy Policy, Elsevier, vol. 57(C), pages 441-453.
  5. Wang, H. & Zhou, P. & Zhou, D.Q., 2012. "An empirical study of direct rebound effect for passenger transport in urban China," Energy Economics, Elsevier, vol. 34(2), pages 452-460.
  6. Hirte, Georg & Tscharaktschiew, Stefan, 2013. "The optimal subsidy on electric vehicles in German metropolitan areas: A spatial general equilibrium analysis," Energy Economics, Elsevier, vol. 40(C), pages 515-528.
  7. Hirte, Georg & Tscharaktschiew, Stefan, 2013. "Income tax deduction of commuting expenses in an urban CGE study: The case of German cities," Transport Policy, Elsevier, vol. 28(C), pages 11-27.
  8. Tscharaktschiew, Stefan & Hirte, Georg, 2011. "Should subsidies to urban passenger transport be increased? A spatial CGE analysis for a German metropolitan area," Dresden Discussion Paper Series in Economics 01/11, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
  9. Kok, Robert & Annema, Jan Anne & van Wee, Bert, 2011. "Cost-effectiveness of greenhouse gas mitigation in transport: A review of methodological approaches and their impact," Energy Policy, Elsevier, vol. 39(12), pages 7776-7793.
  10. Jonathan E. Hughes & Daniel Kaffine, 2013. "When is Encouraging Consumption of Common Property Second Best? Sorting, Congestion and Entry in the Commons," Working Papers 2013-05, Colorado School of Mines, Division of Economics and Business.
  11. Lin, Boqiang & Liu, Xia, 2013. "Reform of refined oil product pricing mechanism and energy rebound effect for passenger transportation in China," Energy Policy, Elsevier, vol. 57(C), pages 329-337.
  12. Litman, Todd, 2013. "Changing North American vehicle-travel price sensitivities: Implications for transport and energy policy," Transport Policy, Elsevier, vol. 28(C), pages 2-10.
  13. Mendiluce, María & Schipper, Lee, 2011. "Trends in passenger transport and freight energy use in Spain," Energy Policy, Elsevier, vol. 39(10), pages 6466-6475, October.
  14. Anas, Alex & Hiramatsu, Tomoru, 2012. "The effect of the price of gasoline on the urban economy: From route choice to general equilibrium," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 855-873.
  15. Nitzsche, Eric & Tscharaktschiew, Stefan, 2013. "Efficiency of speed limits in cities: A spatial computable general equilibrium assessment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 56(C), pages 23-48.

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