Rebound Effect or Induced Demand? Analyzing the Compound Dual Effects on VMT in the U.S.

This research explored the dual influence of fuel efficiency and roadway capacity on vehicle distance traveled. The empirical study was conducted by applying a generalized least square (GLS) analysis to the U.S. state-level panel data of fuel efficiency, roadway lane-miles, and vehicle miles traveled (VMT) for over three decades (1980–2010). The analysis confirmed the co-existence of rebound effect and induced demand on driving distances over the decades—improved fuel efficiency and expanded roadway capacity caused additional vehicle distance traveled, partially offsetting the benefits of the measures taken. Furthermore, the results showed that the magnitude of each effect would be unjustifiably overestimated if this dual influence was not taken into consideration