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Abstract

This lecture brings the audience to the boundaries between traffic engineering, transport economics and statistical modelling. The speaker and his co-authors propose a novel approach to estimate the marginal external congestion cost of motor vehicle travel and associated welfare losses. This externality quantifies the cost that an additional driver imposes on fellow road users, primarily in the form of travel time delay. The proposed modelling approach allows for hypercongestion, i.e. the state when the road supply curve is backward bending, thus leading to simultaneously falling average speed and traffic volume. The existence of hypercongestion as a stable outcome of steady-state equilibria, and therefore its actual social cost, have been in the focus of fierce academic debates over recent decades.

In their new approach, the authors use the quasi-experimental variation of public transit supply during strikes in the city of Rome to address endogeneity issues. They find that the marginal external cost is substantial. Hypercongestion accounts for about 30 percent of welfare losses due to congestion. They demonstrate that the marginal congestion-relief benefit of public transit supply is sizeable and approximately constant over the full range of public transit supply levels. These results imply that large welfare gains can be obtained not only by introducing road pricing, but also by adopting quantity-based measures (e.g. adaptive traffic lights) to avoid hypercongestion. The results also support separate lanes for buses, as road congestion has a strong effect on travel time delays of bus travellers.

Speaker

Professor Jos van Ommeren is Professor of Urban Economics at the Department of Spatial Economics (VU University Amsterdam). He is also a fellow of the Tinbergen Institute. He studied Econometrics at the University of Amsterdam and London School of Economics. His main research interests are in the areas of urban economics with a focus on urban transport.