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

  • David Levinson

    ()

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

  • Ramachandra Karamalaputi

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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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
Contact details of provider: 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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  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. Pavithra Parthasarathi & David Levinson & Ramachandra Karamalaputi, 2003. "Induced Demand: A Microscopic Perspective," Working Papers 200301, University of Minnesota: Nexus Research Group.
  3. 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.
  4. Brownstone, David & Train, Kenneth, 1999. "Forecasting new product penetration with flexible substitution patterns," University of California Transportation Center, Working Papers qt3tb6j874, University of California Transportation Center.
  5. 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.
  6. 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.
  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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