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The Tipping Point

As we consider the shovel ready road and bridge projects of the stimulus package, consider this important analysis by our colleague Joe Cortright of the impact modest declines in auto travel have on congestion.  And how that could save us big, big money...

Last year, the US made more progress in reducing traffic congestion than any other time in history. New data show that in 2008 the amount of traffic congestion in the nation's cities declined by 30 percent, and that congestion was lower in every hour of every day in 2008 than it had been the year previously. How did we make these big gains? Not by adding more highway lanes or transit -- the physical infrastructure barely changed -- we did it with a very modest decline in car travel. On urban interstate highways, total vehicle miles traveled in the US declined by about 3 percent in 2008.

The decline in congestion -- which analysts have labeled 'startling" -- was almost universal. Traffic congestion actually declined in 99 of the nation's 100 largest metro areas, according to Inrix, which monitors traffic around the nation. The company's data come from tens of billions of reports from GPS-equipped vehicles traveling the nation's roads, the same data that provides real-time traffic information to commercial users and web-services like Mapquest, Garmin and On-Star.

Their key conclusions: "peak hour congestion on the major roads in urban America decreased nearly 30 percent in 2008 versus 2007*," *and* *nationally, "congestion was lower every hour of every day in 2008 versus 2007 – between 15 percent and 60 percent lower depending on the hour and day." See the full report here.

How did such a small decline in travel produce such a big drop in congestion? It's well known that traffic congestion is subject to a tipping point--what economists call non-linearities. Add an additional car to a crowded road at rush hour, and traffic slows down a bit, and then the "carrying capacity" of the road declines. Traffic engineers estimate that most roads carry their maximum throughput -- number of vehicles per hour at about 40 miles per hour -- so as traffic slows below that speed, the road actually loses capacity and goes slower and slower, producing a traffic jam.

But the same is true in reverse.  Take a few cars off the road at rush hour, and traffic moves faster, and highways can actually carry more vehicles. And in every large American city, that's exactly what has happened in the past year.

As the Inrix study concludes:

Demand management can have sizeable impact on congestion, even if total volume changes are modest. Massive increases in fuel prices had effects similar to policy initiatives under consideration such as variable pricing, managed lane strategies and better travel information. When a road network is at capacity, adding or subtracting even a single vehicle has disproportionate effects for the network. This phenomenon has been well known for a long time, but this data illustrates it in real-world terms on a nationwide basis.

This natural experiment has an important implication for transportation policy. Policies that reduce car trips at the peak hour -- transportation demand management -- can cut congestion and make travel faster for everyone else. In effect, over the past 12 months, we've implemented demand management through the combination of higher gas prices and a weaker economy. But we could just as effectively--and more efficiently -- accomplish the same purpose with other policies, especially variable road pricing.

It's worth thinking about how much less expensive a solution this would be than building additional capacity. Imagine how many tens or hundreds of billions it would cost to reduce congestion by 30 percent by building new roads.

There's a huge free lunch of additional carrying capacity in our road system that could be used if we managed demand slightly better.  Currently, we ration traffic capacity the same way the old Soviet Union rationed bread -- by having everyone wait in line. It's a wasteful way to allocate bread, and it's a wasteful way to allocate scarce road space at rush hour. Pricing the roads to reduce peak volumes slightly -- by encouraging those with flexible schedules to take the trip at some other time, go by another mode, or forego the trip altogether -- makes the system work better for everyone else and actually increases its capacity.

The technology for implementing road pricing is already in hand and has been implemented around the country through "fast pass" electronic tolling. Large scale demonstrations of road pricing have had a signficant affect on congestion in London and Stockholm.

If we truly want to have a smart transportation system for the 21st Century, we'll see the lessons of the "tipping point."

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