Assembly David Levinson

Induced Travel S1: Supply before S2: Supply after Price of Travel Quantity of Travel (VMT) Q1 Q2 P1 P2 Demand

Elasticity %Change in Demand / % Change in Price (  Q/Q)/(  P/P) Typically look at a 1% change in price when measuring change in demand, that is, try to keep it “marginal”.

Understanding Elasticity Feature Elastic goods Inelastic goods PED value Greater than 1 Less than 1 A rise in price means A larger fall in demand A smaller fall in demand Slope of demand curve Flat Steep Number of substitutes Many Few Type of good Luxury Necessity Price of good Expensive Cheap Example Hyundai Gasoline

Types of Elasticity Price Elasticity of Demand (Demand Changes with Price) Price Elasticity of Supply (Supply Changes with Price) Cross Elasticity of Demand (Demand Changes with Price of Another Good) Income Elasticity of Demand (Demand Changes with Income).

How Highway Expansion Effects Travel and Activity [Round Robin] Makes network faster, Higher attainable speeds lead to time savings in travel (price) Increases accessibility Broadens commuter’s travel choices More non-travel activities Individuals maximize their utility

Estimating How Much Price Elasticity of Demand Capacity is surrogate for Time (or Price) % Change in Demand / % Change in Capacity Or If You Like Calculus e = dQ/dP.

Elasticities

Induced Demand: A Microscopic Approach Measure Extent of Induced Demand due to Roadway Expansions (Not New Roads) Use Data on Twin Cities Links Over 20 Years

Capacity Growth in Twin Cities

1995 Road Network Used in Analysis

Summary of Change in VKT

Model

Estimated Elasticities

Implications Increase in highway capacity has a small but significant impact on individual’s activity and travel patterns Expansion of Roadways does induced some additional demand, but the elasticity is < 1 New Construction has larger effects Effect on Workers and Non-Workers are different

Time Spent at Activities Increases S1S2 U +ve A S1 A S2 T S1 T S2 Time Spent Traveling Decreases Travel Time (T) Activity Duration (A) 1440 minutes Utility Increases with Expansion Fixed Daily Time Budget “Demand” Line Travel and Activity Duration Production Function

Data 1990/91 and 1995/96 Nationwide Personal Transportation Survey 1990 and 1995 Federal Highway Administration Highway Statistics Individuals whose total activities did not add to 1440 minutes (24 hrs), excluded This study looks only at adults, years of age Excluded travelers with a daily shopping time greater than 420 minutes

Description of Variables T 90i Time spent at activity "i" in 1990 iIndex of activities (travel to and duration at home, work, shop and other) AAge DLocal population Density GGender H Household Income levels LFamily lifecycle characteristics MMonth of year interview was conducted SState specific variables WDay of week interview was conducted

Methodology Since the NPTS was not conducted as a panel survey, we first estimate a model of 1990 individuals, and then apply that model to 1995 individuals in the form Estimated Travel Behavior for 1990 individuals can be determined in the form Then we estimated a difference model of change in travel behavior between the 1995 individuals their best estimate of 1990 behavior

Difference Model change in time at activity "i" between 1995 and 1990 (estimated ) s.t.

Hypothesis for Workers TRAVEL TO TIME SPENT AT HWSO ---- Time Savings From Travel Faster Network Time Savings From Travel HWSO --++ Reduced Peak Spreading Big Box Stores Pleasure Oriented Time Savings From Travel

Hypothesis for Non Workers TRAVEL TO TIME SPENT AT HSO ++- More # of Home-Shop Trips Faster Network HSO ++- Less Discretionary Pleasure Oriented

Elasticity of Time with respect to Capacity * Indicates significance at 95% confidence level

Results Due to Highway Capacity Expansion Workers spend more Time at Home and Other, Less Time at Work and Shop Non-Workers spend more Time at Home and Other, Less Time at Other Non-workers take more Home to Shop trips

Questions?