Traffic could cause roads: greater traffic leads to greater expenditure on roads. Or roads could cause traffic: greater supply of roads leads to more driving and hence traffic. Which way is it?
This is studied by Duranton and Turner in a forthcoming paper in AER. They use an instrumental variables approach to identify causation. A 1947 plan envisaged a highway network connecting existing population centers. Importantly for this study, tha plan was based on existing population centers not forecast traffic demand. Hence, the impact of the greater availability of roads on traffic can be studied (while controlling for factors such as population). The authors find:
For interstate highways in metropolitan areas we find that VKT (vehicle kilometers traveled)
increases one for one with interstate highways, confirming the ‘fundamental law of highway congestion’
Provision of public transit also simply leads to the people taking public transport being replaced by drivers on the road. Therefore:
These findings suggest that both road capacity expansions and extensions to public transit are not
appropriate policies with which to combat traffic congestion. This leaves congestion pricing as the main
candidate tool to curb traffic congestion.
Cheap Talk 
4 comments
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October 31, 2011 at 5:07 pm
Lones Smith
Cool. So these dudes are doing for traffic what Levitt did for crime in his 1997 AER that set his freakonomics career in motion (but they do not cite him).
Next up on this agenda: do miserable economic times cause more economic PhDs or do more economic PhDs cause miserable economic times? Instrument: an unexpected increase in NSF funding for economics….
Empirical work seems so much more satisfying …. for the first 5 minutes…. ^_^
November 1, 2011 at 7:01 pm
Mike
“Provision of public transit also simply leads to the people taking public transport being replaced by drivers on the road.”
Is that saying that new drivers appear to replace the ones who start using transit? where do these new drivers come from?
November 2, 2011 at 8:40 am
Roads, traffic, and the importance in decision analysis of carefully examining your goals « Statistical Modeling, Causal Inference, and Social Science
[…] of carefully examining your goals Posted by Andrew on 2 November 2011, 9:37 amSandeep Baliga writes: [In a recent study, Gilles Duranton and Matthew Turner write:]For interstate highways in […]
November 2, 2011 at 3:35 pm
Eli Rabett
All that Duranton and Taylor prove is that you can get a useless answer if you ask the wrong question. No one is interested in congestion as such. People are interested in how long it takes to get from A to B. Building highways between population centers improves that, more mass transit improves that, building better roads improves that.
As Mike points out this is nonsense for a number of reasons, among which is where are you going to get the extra people to fill up the roads, if you improve public transport. Moreover, the people who switch are getting where they want to go faster (otherwise why switch) with less stress, so that outcome is a gain, even if you rustle up enough extra drivers to maintain congestion