BITRE | Working paper 74 Figure 2.7 Capacity expansion impact on travel cost Generalised cost (price) Demand Supply 1 Supply 2 GC 1 GC 2 Q 1 Q 2 Quantity Opposition to the expansion of roads needs to be understood in this context. When the impact is to reduce the price of using the road (because there is now less timeconsuming congestion) this can lead to the transfer of travellers from ‘environmentallyfriendly’ public transport, to road. For example, much of the decline in patronage on Sydney’s CityRail East Hills line in 2003 was attributed to the opening of the M5 East motorway tunnel link. 23 Hence, critics of capacity expansion argue that the benefits are quickly eroded because the reduced congestion attracts more road users. The inevitable conclusion is that ‘we can’t build our way out of congestion’. The Sierra Club, a long-established American environmental organisation, articulated the argument: 28 The jury is in! Recent studies show that building or widening highways induces more traffic, called induced travel. Shortly after the lanes or road is opened traffic will increase to 10 to 50% of the new roadway capacity as public transit or car-pool riders switch to driving, or motorists decide to take more or longer trips or switch routes. This is short-term induced travel. In the longer term (three years or more), as the new roadway capacity stimulates more sprawl and motorists move farther from work and shopping, the total induced travel rises to 50 to 100% of the roadway’s new capacity (Sierra Club undated). Similarly, in the context of the M6 Toll in England comes this comment: This new road carries false hopes of a congestion-free future. But the road is unlikely to reduce congestion on the M6 other than in the very short term. Any immediate advantage is likely to be quickly swamped by new traffic (Hounsham 2003). We now consider how significant this travel inducement is and then examine the possible policy implications. Such implications include policy measures that seek to prevent induced travel—often referred to as ‘locking in the benefits’. 23. See, for instance, Kerr (2003).
Chapter 2 | Prevailing strategies to manage congestion How significant is the induced travel effect A decline in congestion and the consequent reduction in travel will invariably attract more traffic. Exactly how much more traffic depends on a number of factors, including time savings involved. In general, the magnitude of the induced travel effect will depend on: • the behavioural response to the capacity expansion; and • how broadly induced travel is interpreted. The following section reviews the relative importance of the factors that determine the magnitude of the induced travel effect. Behavioural response to the capacity expansion The response of users to a reduction in congestion due to capacity expansion will vary between locations and, for the same location, at different times. People can make immediate and simple adjustments to travel patterns, such as leaving for work a little later in the morning, while in the longer term they can change their work or home location. Because the level of induced travel is so much a function of location, it is not surprising that there is wide variance in the short- and long-term responses to capacity expansion. Estimates of the traffic growth due to network expansion vary widely and in the following table range between 10 per cent (in the short term) to up to 100 per cent (in the long-term), as illustrated in the following summary compiled by the Sierra Club (Table 2.1). Table 2.1 Share of new capacity filled with induced travel Short‐term Long‐term (3 years) (per cent) SACTRA 50–100 Goodwin 28 57 Johnson and Ceerla 60–90 Hansen and Huang 90 Fulton, et al 10–40 50–80 Marshall 76–85 Noland 20–50 70–100 Source: Sierra Club (undated). Economics has a term for the responsiveness of the level of consumption of a good or service to a change in price: the elasticity of demand. The more elastic the demand for road use, the greater the increase in use following a fall in price. In this case, the ‘price’ is the generalised cost of travel. Essentially, demand is regarded as elastic if a small reduction in the generalised cost results in a large increase in demand. Such a high degree of responsiveness is suggested by the studies where traffic congestion ‘recovers’ to its previous level within 3 years of capacity expansion. For instance, dramatic traffic growth followed the completion of the M25, the 188 kilometre orbital motorway that encircles London (see Figure 2.8). Within one year of opening, traffic levels had reached the levels forecast for the 15th year after opening: 29