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

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  • David Levinson
  • Ramachandra Karamalaputi

Abstract

This paper examines the growth of a highway network based on the present and historical conditions of the network, traffic demand, demographic characteristics, project costs, and budget. The effects of expanding a link on its upstream and downstream neighbours, as well as on parallel links, are also considered. Data span two decades and consist of physical attributes of the network, their construction and expansion history, and traffic levels on each of the links. An observation of this research is that the rate of network expansion has decreased over time. The pattern of expansion for each type of highway was found to differ only marginally, indicating that the model estimated is reliable for general use. The models developed here have important implications for planning and forecasting. © The London School of Economics and the University of Bath 2003

Suggested Citation

  • David Levinson & Ramachandra Karamalaputi, 2003. "Induced Supply: A Model of Highway Network Expansion at the Microscopic Level," Journal of Transport Economics and Policy, University of Bath, vol. 37(3), pages 297-318, September.
  • Handle: RePEc:tpe:jtecpo:v:37:y:2003:i:3:p:297-318
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. 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.
    4. 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.
    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. 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.
    7. Pavithra Parthasarathi & David M. Levinson & Ramachandra Karamalaputi, 2003. "Induced Demand: A Microscopic Perspective," Urban Studies, Urban Studies Journal Limited, pages 1335-1351.
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    Citations

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    Cited by:

    1. Lei Zhang & David Levinson, 2006. "Economics of Road Network Ownership," Working Papers 200908, 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. Lei Zhang & David Levinson, 2005. "Road Pricing with Autonomous Links," Working Papers 200506, University of Minnesota: Nexus Research Group.
    4. repec:eee:trapol:v:58:y:2017:i:c:p:72-79 is not listed on IDEAS
    5. David Levinson, 2008. "Density and dispersion: the co-development of land use and rail in London," Journal of Economic Geography, Oxford University Press, vol. 8(1), pages 55-77, January.
    6. 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.
    7. Nikolas Geroliminis & David Levinson, 2008. "Cordon pricing consistent with the physics of overcrowding," Working Papers 000038, University of Minnesota: Nexus Research Group.
    8. David Levinson & Wei Chen, 2004. "Paving New Ground," Working Papers 200509, University of Minnesota: Nexus Research Group.
    9. Lei Zhang & David Levinson, 2006. "The Economics of Transportation Network Growth," Working Papers 200710, University of Minnesota: Nexus Research Group.
    10. C. Jacobs-Crisioni & C. C. Koopmans, 2016. "Transport link scanner: simulating geographic transport network expansion through individual investments," Journal of Geographical Systems, Springer, vol. 18(3), pages 265-301, July.
    11. Martin, Juan Carlos & García-Palomares, Juan Carlos & Gutierrez, Javier & Román, Concepción, 2010. "Efficiency and equity of orbital motorways in Madrid," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 3(1), pages 67-84.
    12. Feng Xie & David Levinson, 2009. "Jurisdictional Control and Network Growth," Networks and Spatial Economics, Springer, vol. 9(3), pages 459-483, September.
    13. David Levinson & Wei Chen, 2007. "Area Based Models of New Highway Route Growth," Working Papers 200708, University of Minnesota: Nexus Research Group.
    14. 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.

    More about this item

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • D10 - Microeconomics - - Household Behavior - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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