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Chapter 2 | Prevailing strategies to manage congestion

Project and location-specific features determine road users’ response to capacity

expansion. Nonetheless, the degree of induced travel is determined by the definition

of induced travel.

So, how broadly should induced travel be interpreted

There are a number of interpretations of ‘induced travel’. When used in a critical

sense as a shortcoming of the ‘build more roads’ approach, induced travel generally

refers to all the traffic growth that follows capacity expansion.

However, this interpretation is too simplistic and fails to recognise that there are a

number of other sources of traffic growth unrelated to capacity expansion. These can

be divided into:

• those that also reduce generalised travel costs; and

• other, external aggregate factors (income, economic activity, population, leisure

time and other lifestyle changes).

These are examined in more detail below.

While infrastructure expansion generally leads to lower generalised travel costs,

other factors have also been putting downward pressure on inflation-adjusted travel

costs. Even taking account of oil price spikes, vehicle purchasing and operating

costs have consistently trended downward. At the same time, vehicle quality and

comfort (which, in principle—but not in practice—is also part of generalised cost)

have improved considerably. Reliable data series that incorporate quality changes are

difficult to find, but Axhausen (2005) compiled the following chart (Figure 2.9) from

two time series (different time periods, different countries) to illustrate the ‘true

price change’ of motor vehicles, after quality improvements are taken into account.

The quality-adjusted price of cars has fallen dramatically throughout the last century,

against a background of rising incomes. What is evident from the chart is that the

most dramatic falls in the quality-adjusted purchase price for vehicles was during the

first 30 years of introduction of the motor vehicle, with blips for the two world wars.

The rate of decline has slowed considerably over the last few decades, but there is

still a downward trend in prices.

Improved vehicle quality has also meant declining maintenance costs—which, in turn,

contributes to the long-term trend in the reduction in the generalised cost of travel.

In addition to falling generalised travel costs, there are wider social and economic

factors that have also contributed to an increase in road use. Strong economic activity

generates increased commercial and commuting traffic. Continued economic growth

has brought rising incomes and more leisure time both of which lead to an increase

in the demand for travel. 25 Between 1985–86 and 2005–06, Australian per capita final

consumption on transport closely tracked real household consumption expenditure,

which more than doubled (in real terms) in the 45 years to 2006. 26

25. The very presence of this apparent linkage has given rise to policy initiatives aimed at breaking the link (‘decoupling’,

to use the jargon) between economic growth and car usage.

26. At 2004–05 prices, refer to ABS (2007).

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