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Induced Supply: A Model of Highway Network Expansion at the Microscopic Level

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Author Info

  • David Levinson

    ()
    (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)

  • Ramachandra Karamalaputi

Abstract

This paper examines the growth of a network based on the present conditions of the network, traffic demand, other demographic characteristics, project costs, and a budget constraint. The effects of expanding a link on its upstream and downstream neighbors, as well as on parallel links are also considered. Data spans two decades and consists of data on physical attributes of the network, their expansion history and AADT values on each of the links. A non-linear cost model is developed for the Twin Cities Metropolitan Area. Results show that high capacity links are more likely to be expanded and a higher budget result in more links being expanded. Large population in the surrounding region deters two-lane expansion because of the high cost associated with such an expansion but a one-lane expansion is favored. One of the important results of this research is that the rate of network expansion has decreased over the years.

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File URL: http://nexus.umn.edu/Papers/InducedSupply.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by University of Minnesota: Nexus Research Group in its series Working Papers with number 200304.

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Date of creation: 2003
Date of revision:
Publication status: Published in Journal of Transport Economics and Policy , Volume 37, Part 3, September 2003, pp. 297–318
Handle: RePEc:nex:wpaper:inducedsupply

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Postal: Dept. of Civil Engineering, 500 Pillsbury Drive SE, Minneapolis, MN 55455
Phone: +01 (612) 625-6354
Fax: +01 (612) 626-7750
Web page: http://nexus.umn.edu
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Related research

Keywords: Network expansion; Cost Model; Transportation forecasting; adjacent links in a network.;

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References

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  1. Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
  2. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
  3. Crain, W Mark & Oakley, Lisa K, 1995. "The Politics of Infrastructure," Journal of Law and Economics, University of Chicago Press, vol. 38(1), pages 1-17, April.
  4. Noland, Robert B., 2001. "Relationships between highway capacity and induced vehicle travel," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(1), pages 47-72, January.
  5. Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August.
  6. Pavithra Parthasarathi & David Levinson & Ramachandra Karamalaputi, 2003. "Induced Demand: A Microscopic Perspective," Working Papers 200301, University of Minnesota: Nexus Research Group.
  7. Bhat, Chandra R. & Castelar, Saul, 2002. "A unified mixed logit framework for modeling revealed and stated preferences: formulation and application to congestion pricing analysis in the San Francisco Bay area," Transportation Research Part B: Methodological, Elsevier, vol. 36(7), pages 593-616, August.
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Citations

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Cited by:
  1. David Levinson & Wei Chen, 2004. "Paving New Ground," Working Papers 200509, University of Minnesota: Nexus Research Group.
  2. David Levinson & Ramachandra Karamalaputi, 2003. "Predicting the Construction of New Highway Links," Working Papers 200305, University of Minnesota: Nexus Research Group.
  3. David Levinson, 2007. "Density and Dispersion: The Co-Development of Land use and Rail in London," Working Papers 200801, University of Minnesota: Nexus Research Group.
  4. Nikolas Geroliminis & David Levinson, 2008. "Cordon pricing consistent with the physics of overcrowding," Working Papers 000038, University of Minnesota: Nexus Research Group.
  5. Feng Xie & David Levinson, 2009. "Jurisdictional Control and Network Growth," Networks and Spatial Economics, Springer, vol. 9(3), pages 459-483, September.
  6. Lei Zhang & David Levinson, 2006. "The Economics of Transportation Network Growth," Working Papers 200710, University of Minnesota: Nexus Research Group.
  7. Lei Zhang & David Levinson & Shanjiang Zhu, 2007. "Agent-Based Model of Price Competition and Product Differentiation on Congested Networks," Working Papers 200809, University of Minnesota: Nexus Research Group.
  8. Hongyan Chen & Ruwen Qin, 2012. "Real options as an incentive scheme for managing revenues in transportation infrastructure projects," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 6(1/2), pages 77-101.
  9. Lei Zhang & David Levinson, 2005. "Road Pricing with Autonomous Links," Working Papers 200506, University of Minnesota: Nexus Research Group.
  10. Lei Zhang & David Levinson, 2006. "Economics of Road Network Ownership," Working Papers 200908, University of Minnesota: Nexus Research Group.
  11. David Levinson & Wei Chen, 2007. "Area Based Models of New Highway Route Growth," Working Papers 200708, University of Minnesota: Nexus Research Group.

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