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Optimizing Road Capacity and Type


  • Kenneth Small

    () (Department of Economics, University of California-Irvine)

  • Chen Feng Ng

    () (Department of Economics, California State University at Long Beach)


We extend the traditional road investment model, with its focus on capacity and congestion as measures of capital and its utilization, to include free-flow speed as another dimension of capital. This has practical importance because one can view free-flow speed as a continuous proxy for road type (e.g. freeway, arterial, urban street). We derive conditions for optimal investment in capacity and free-flow speed, and analyze the optimal balance between the two. We then estimate cost functions for capital and user costs and apply the resulting model using parameters representing large US urban areas. We show that providing high free-flow speed may be quite expensive, and there is sometimes a tradeoff between it and capacity. We find suggestive evidence that representative freeways in most large urban areas provide too high a free-flow speed relative to capacity, thus making the case for reexamination of typical design practice.

Suggested Citation

  • Kenneth Small & Chen Feng Ng, 2013. "Optimizing Road Capacity and Type," Working Papers 121309, University of California-Irvine, Department of Economics.
  • Handle: RePEc:irv:wpaper:121309

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    References listed on IDEAS

    1. Kraus, Marvin, 1981. "Scale economies analysis for urban highway networks," Journal of Urban Economics, Elsevier, vol. 9(1), pages 1-22, January.
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    6. Chen Ng & Kenneth Small, 2012. "Tradeoffs among free-flow speed, capacity, cost, and environmental footprint in highway design," Transportation, Springer, vol. 39(6), pages 1259-1280, November.
    7. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-260, May.
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    Cited by:

    1. Nguyen, Hien D. & McLachlan, Geoffrey J., 2016. "Linear mixed models with marginally symmetric nonparametric random effects," Computational Statistics & Data Analysis, Elsevier, vol. 103(C), pages 151-169.
    2. Nguyen, Hien D. & McLachlan, Geoffrey J. & Ullmann, Jeremy F.P. & Janke, Andrew L., 2016. "Laplace mixture autoregressive models," Statistics & Probability Letters, Elsevier, vol. 110(C), pages 18-24.
    3. Diana, Tony, 2015. "An evaluation of departure throughputs before and after the implementation of wake vortex recategorization at Atlanta Hartsfield/Jackson International Airport: A Markov regime-switching approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 83(C), pages 216-224.
    4. Kohli, Priya & Garcia, Tanya P. & Pourahmadi, Mohsen, 2016. "Modeling the Cholesky factors of covariance matrices of multivariate longitudinal data," Journal of Multivariate Analysis, Elsevier, vol. 145(C), pages 87-100.
    5. Kwun Chuen Gary Chan, 2017. "Acceleration of Expectation-Maximization algorithm for length-biased right-censored data," Lifetime Data Analysis: An International Journal Devoted to Statistical Methods and Applications for Time-to-Event Data, Springer, vol. 23(1), pages 102-112, January.
    6. Nguyen, Hien D. & McLachlan, Geoffrey J., 2016. "Laplace mixture of linear experts," Computational Statistics & Data Analysis, Elsevier, vol. 93(C), pages 177-191.
    7. Samsatli, Sheila & Samsatli, Nouri J. & Shah, Nilay, 2015. "BVCM: A comprehensive and flexible toolkit for whole system biomass value chain analysis and optimisation – Mathematical formulation," Applied Energy, Elsevier, vol. 147(C), pages 131-160.
    8. Nguyen, Hien D. & McLachlan, Geoffrey J., 2016. "Maximum likelihood estimation of triangular and polygonal distributions," Computational Statistics & Data Analysis, Elsevier, vol. 102(C), pages 23-36.

    More about this item


    Capacity; Free-flow speed; Highway design; Optimal highway investment; Congestion;

    JEL classification:

    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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