Road Congestion

Every driver will have experienced the situation in which, as additional traffic joins a road, speeds fall, queues form and travel times become longer and more predictable. Engineers and traffic scientists have devoted considerable effort to understanding how such conditions arise, and how the key parameters of traffic flow, traffic concentration (or density) and traffic speed are related on individual roads (links) and in networks. This relationship, often referred to as the fundamental diagram of traffic, can be derived from first principles and from empirical evidence. Economists and planners are more concerned with how to avoid the onset of congestion or to reduce its impact. This can be achieved in a range of ways, including enhancing capacity and managing the network better (both supply-side measures) and pricing, regulation and the provision of alternatives (which can be thought of as demand-side measures). Pricing and investment in roads are considered further in Chapter 12. In analysing them, economists need to understand both how the costs of travel are affected by travel demand (the supply curve) and how the demand for travel is influenced by the costs of travel (the demand curve)