Two Empirical Tests of Hypercongestion

59 Pages Posted: 2 Apr 2018

See all articles by Michael L. Anderson

Michael L. Anderson

U.C. Berkeley - Department of Agricultural and Resource Economics

Lucas W. Davis

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Date Written: March 2018

Abstract

There is a widely-held view that as demand for travel goes up, this decreases not only speed but also the capacity of the road system, a phenomenon known as hypercongestion. We revisit this idea. We propose two empirical tests motivated by previous analytical models of hypercongestion. Our first test uses instrumental variables to empirically isolate the effect of travel demand on highway capacity. Our second test uses an event study analysis to measure changes in highway capacity at the onset of queue formation. We apply these tests to three highway bottlenecks in California for which detailed data on traffic flows and vehicles speeds are available. Neither test shows evidence of a reduction in highway capacity at any site during periods of high demand. Across sites and specifications we have sufficient statistical power to rule out small reductions in highway capacity. This lack of evidence of hypercongestion has important implications for travel supply and demand models and raises questions about highway metering lights and other traffic interventions aimed at regulating demand.

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Suggested Citation

Anderson, Michael L. and Davis, Lucas W., Two Empirical Tests of Hypercongestion (March 2018). NBER Working Paper No. w24469, Available at SSRN: https://ssrn.com/abstract=3154251

Michael L. Anderson (Contact Author)

U.C. Berkeley - Department of Agricultural and Resource Economics ( email )

207 Giannini Hall, MC 3310
Berkeley, CA 94720-3310
United States

Lucas W. Davis

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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