Inframarginal Travelers and Transportation Policy

Abstract

Half of all travelers have such inflexible schedules that they strictly prefer their chosen arrival times to all others; however, existing models of traffic congestion implicitly assume that no such inframarginal travelers exist. This leads these models to predict travel times nearly seven times greater than those observed or a length of the peak period a seventh that observed (or, more often, a combination of the two). Accounting for these travelers significantly improves these models’ ability to fit the data and changes policy prescriptions. In the case of congestion pricing, it typically changes the optimal toll by at least 25% and significantly worsens the distributional impacts.

Keywords: Structural model, Congestion, Model fit, Calibration, Dynamic, Bottleneck model, Traffic

JEL Classification: R4, H4