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Page 1: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10
Page 2: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Delay Due to Highway Congestion

Estimates from Texas Transportation Institute40 hours per person per year for California cities

Page 3: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Preview

A model of highway congestionWhat can be doneHand back second midterm

Page 4: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Highway Capacity

One lane from A to BDistance is 10 milesSpeed limit is 60 mphAt 60 mph, 10 minutesHow many cars make the trip during a 10 minute interval?

Page 5: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

B A

10 miles between cars

1 car per period

Page 6: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

B A

5 miles between cars

2 cars per period

Page 7: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

B A

2 miles between cars

6 cars per period

Page 8: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

B A

no space between cars

2,640 cars per period(5,280ftx10/20ft)

Page 9: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Traffic Time and Travel Volume

travelers per period

minutes

10

2,640

Page 10: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

What’s Wrong With This Picture?

travelers per period

minutes

10

2,640

Page 11: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

A Better Picture

travelers per period

minutes

10

2,640

Page 12: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Freeway Travel Time from A to B

minutes

n, travelers per period

no congestion

congestion

f(n)

Page 13: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

The Cost of Traveling from A to B

n is travelers per periodTravel time on freeway: f(n)Value of time: vCost of traveling from A to B

vf(n)

Page 14: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

The Demand for Travel

Commuters have alternativesMass transitCommute at different hours

Given alternatives, each commuter has a willingness to pay to travel on highway during a particular periodIf WTP > cost, commute on highway

Page 15: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

A Demand Curve for Travel

Order commuters bywillingness to pay

commuters

$/trip

Page 16: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Equilibrium

$/trip private cost

nne

demand

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Total Cost for Freeway Drivers

Cost if n-1 travelers on freeway:v(n-1)f(n-1)

Cost if n travelers on freeway:vnf(n)

Page 18: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Marginal CostIncrease in cost from one more traveleron the freeway:

vnf(n)-v(n-1)f(n-1)

=v(n-1)f(n)+vf(n)-v(n-1)f(n-1)

=v(n-1)[f(n)-f(n-1)]+vf(n)

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Marginal Cost

=v(n-1)[f(n)-f(n-1)]+vf(n)

external cost internal cost(private cost)

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The Calculus of Marginal Cost

C(n)=nvf(n)

C’(n)=nvf’(n)+vf(n)

externalcost

internal(private)

cost

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Marginal Social Cost

$/trip

n

vf(n)

v(n-1)[f(n)-f(n-1)]

MSC

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Optimum vs Equilibrium

$/trip

n

vf(n)

MSC

no ne

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Achieving Optimum through Congestion Toll

$/trip

n

vf(n)

MSC

no ne

toll, p

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Gain to Society

$/trip

n

vf(n)

MSC

no neReduction in cost

Reduction in benefit

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Winners and Losers

Commuters?Government?

Page 26: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

An Application: SR91

State Road 91Express lanes in median (4 lanes)10 mile stretch from Riverside to AnaheimToll depends on time of dayToll recorded from transponders

Page 27: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10
Page 28: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Location of SR91X

Page 29: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Heading East -- Evening Rush Hour

Page 30: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

Express Lanes

Page 31: Delay Due to Highway Congestion - econ.ucsb.eduecon.ucsb.edu/~jon/Econ120/Spring07/S07Lectures/S07L18_Highwa… · What’s Wrong With This Picture? travelers per period minutes 10

History of SR 91X

OC having difficulty funding new highwaysLegislature allowed private developers to construct toll highway in median of SR 91Opened in 1996

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Tolls - 2000

Wednesday- Westbound12 a.m. – 4 a.m. $0.754 a.m. – 5 a.m. $1.655 a.m. – 6 a.m. $2.906 a.m. - 7 a.m. $3.007 a. m. – 8 a.m. $3.308 a.m. – 9 a.m. $3.009 a. m. –10 a.m. $2.2510 a.m. – 7 p.m. $1.507 p.m. – 12 a.m. $0.75

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Findings About Use

Proportion of commuters using rises with incomeProportion is higher for females

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SR 91 Revenues and Costs

Toll Revenue is covering maintenance and construction costsSold back to public in 2002

Original franchise had “non-compete”clause which prohibited expansion in capacityPublic authority planning capacity enhancing changes

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Congestion tolls can finance road construction and maintenance

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Conclusion

When road has limited capacity, may have congestionWith congestion, additional travelers impose cost on othersIndividuals ignore those costsToo much traffic on roadwayToll internalizes external cost

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Next Time

Tracy GordonChapter 8 Transportation“Fiscal Realities”Public Policy Institute of

California