urban road congestion management - capacity investments and pricing policies
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UrbanRoadCongestionManagement:CapacityInvestmentsandPricingPolicies
HugoE.SilvaPontificia UniversidadCatólica deChile
LeonardoJ.BassoandIgnacioRiquelmeUniversidaddeChile
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Introduction
• Congestionisamajorissue.
▫ Santiago2012:morethan30%ofworkersinSantiago
spendmorethan60minutesinbusesonlygettingtotheir
workplace
▫ US2013:eachpersonspends100minutesperdayintraffic
onaverage,valuedat$760billion(Winston,2013)
▫ London2015:AMPeakspeedincentralLondonis13,4
km/hr andininnerLondonis17,9km/hr
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Introduction
• Congestionisamajorissue.
• Urbantransportpricesdonotreflectmgsocialcosts.
• Whatcanwedo?▫ Buildbigger(more)roads▫ Managecurrentcapacity� Publictransportpriority(e.g.subsidies,buscorridors)� Carcongestionpricing� Drivingrestrictions
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$ 50,000 $ 55,000 $ 60,000 $ 65,000 $ 70,000 $ 75,000 $ 80,000 $ 85,000 $ 90,000 $ 95,000
2002 2004 2006 2008 2010 2012 2014 2016
Mill
ions
of d
olla
rs
Source: US. Bureau of the Census
US Total Construction Spending: Highway and street
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Researchquestions
• Howefficientisaroadinvestmentpolicy?
• Howdoesitcompareandinteractwiththeother
possiblepoliciestoreducecongestion?
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Literature
• Downs-Thomson paradox
▫ Downs (1962).Thomson(1977).Mogridge (1997)• Hypothesis:inequilibrium carandbusgeneralizedcost will beequal (perfect substitutes)
• Consequence:increasing road capacity makescongestion worse
• Graphically..
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Downs-ThomsonhypothesisCost
Total demand
By car By public transport
Car
Public transport
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Downs-Thomson paradox
What happens with road capacity expansion for cars?
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Literature
• BassoandJara-Díaz(2012,TR-A)▫ Ifmodechoiceismorerealistic(imperfectsubstitutes)theDThypothesisdoesnotholdandcarsmaybebetteroffwithroadcapacityexpansion
• Zhang,Lindsey,Yang(2016,TR-B)▫ Relaxthe assumption offixed demand,perfectsubsitutability andinclude transit crowding.Differenttransit operation regimes
• The paradox may not hold
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Literature• Duranton &Turner(2011.AER):empirical
▫ Increasinglanekilometers leadstoaproportionalincreaseofveh-kmtravelled.▫ Elasticityis1▫ Holdsforinterstatetravel
• Hsu&Zhang(2014.JUrbanE)▫ TheelasticityforJapanis1.2– 1.3
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Literature• Issues with this approach
▫ Aggregate(spaceandtimeofday).▫ Nodistinctionbetweenincreasingcapacityofcurrentroadsorextendingthelengthoftheroads▫ Itdoesnotallowforcomparingpoliciesandassessingthesocialbenefit
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Main features▫ Comparisonandinteractionofaroadinvestmentpolicy
withbuscorridors,congestionpricingandtransitsubsidization
▫ Detaileddemandmodel,MCPF,trafficengineering
▫ Cityeffects:� Congestionandnetworksize� Modalsplit� Income(GDP)
▫ Busstop&payment(BS&P)technology
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Low vs high BS&P
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Methodology
1. (Simplified)theoreticalmodelforinsights
2. Morerealisticanddetailedmodelforsimulationsconsideringthreecitytypes:
� European
� American
� Developing
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The theory model
• 𝑌" = 𝐻 𝑔", 𝑔' 𝑌' = 𝑌 − 𝑌"
• 𝑔' = 𝐴𝐶𝐶 + 𝑃' + 𝑡' 𝑌", 𝑌', 𝑓, 𝐾 + 𝑡1 𝑌', 𝑓, 𝑘 + 𝑡3 𝑓
• 𝑔" = 𝐶𝑂" + 𝑃" + 𝑡" 𝑌", 𝑌', 𝑓, 𝐾 + 𝜀(𝑓) 8 𝑡1 𝑌', 𝑓, 𝑘
• 𝑊 = −∫∑ 𝑦=𝑑𝑔=�=
�� + 𝑃" 8 𝑌" + 𝑃' 8 𝑌' − 𝑐 8 𝑓 − 𝜌 8 𝐾
• Optimizeover𝑃", 𝑃', 𝑓,bussize(k)androadcapacity (𝐾).
• Constraintstomodeldifferentpolicies
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The theory model
𝑃" − 𝑃' = 𝑌"𝜕𝑡"𝜕𝑌"
+ 𝑌'𝜕𝑡'𝜕𝑌"
LMNOP
− 𝑌'𝜕𝑡'𝜕𝑌'
+𝜕𝑡1𝜕𝑌'
MNOQR"NOSQ
+ 𝑌"𝜕𝑡"𝜕𝑌'
+ 𝜀𝜕𝑡1𝜕𝑌'
LMNOQ
• Onlythepricedifference canbeidentifiedhere,butseparatelyinthesimulationmodel
• Interpretationasinseparatemodels
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The theory model
𝑃" − 𝑃' = 𝑌"𝜕𝑡"𝜕𝑌"
+ 𝑌'𝜕𝑡'𝜕𝑌"
LMNOP
− 𝑌'𝜕𝑡'𝜕𝑌'
+𝜕𝑡1𝜕𝑌'
MNOQR"NOSQ
+ 𝑌"𝜕𝑡"𝜕𝑌'
+ 𝜀𝜕𝑡1𝜕𝑌'
LMNOQ
• Onlythepricedifference canbeidentifiedhere,butseparatelyinthesimulationmodel
• Interpretationasinseparatemodels
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The theory model
𝑃" − 𝑃' = 𝑌"𝜕𝑡"𝜕𝑌"
+ 𝑌'𝜕𝑡'𝜕𝑌"
LMNOP
− 𝑌'𝜕𝑡'𝜕𝑌'
+𝜕𝑡1𝜕𝑌'
MNOQR"NOSQ
+ 𝑌"𝜕𝑡"𝜕𝑌'
+ 𝜀𝜕𝑡1𝜕𝑌'
LMNOQ
• Onlythepricedifference canbeidentifiedhere,butseparatelyinthesimulationmodel
• Cross-congestioneffects.
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The theory model
𝑃" − 𝑃' = 𝑌"𝜕𝑡"𝜕𝑌"
+ 𝑌'𝜕𝑡'𝜕𝑌"
LMNOP
− 𝑌'𝜕𝑡'𝜕𝑌'
+𝜕𝑡1𝜕𝑌'
MNOQR"NOSQ
+ 𝑌"𝜕𝑡"𝜕𝑌'
+ 𝜀𝜕𝑡1𝜕𝑌'
LMNOQ
• Onlythepricedifference canbeidentifiedhere,butseparatelyinthesimulationmodel
• Busstopandpaymenttechnologyeffects
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The theory model• Buscorridors
• 𝑃" − 𝑃' = 𝑌"TUPTVP
+ 𝑌'TUQTVP
LMNOP
− 𝑌'TUQTVQ
+ TUWTVQ
MNOQR"NOSQ
+ 𝑌"TUPTVQ
+ 𝜖 TUWTVQLMNOQ
• Timefunctions𝑡" and𝑡' aredifferentwithbuslanes
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The theory model• Increasingroadcapacitymakessometermslessimportant.Ifroadcapacityisverylarge:
• 𝑃" − 𝑃' = 𝑌"TUPTVP
+ 𝑌'TUQTVP
LMNOP
− 𝑌'TUQTVQ
+ TUWTVQ
MNOQR"NOSQ
+ 𝑌"TUPTVQ
+ 𝜖 TUWTVQ
LMNOQ
• 𝑃" ≈ 𝑃' −TUWTVQ
𝑌' + 𝜖𝑌"
• Hence,foranygivenPB,theoptimalcongestiontollmaybeverysmall.Evenhitzero.Itdependsheavily on𝑡1
• =>importanceBS&Ptechnology
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The simulation model• BasedonBassoandSilva(2014,AEJ– EconomicPolicy)
• Totalelasticdemand.Twoperiods(peakandoff-peak)withintertemporal elasticity.Marginalcostofpublicfunds
• Weusethebestpossibleengineeringfunctionsavailablefor𝑡",𝑡',𝑡1,ε andbuscosts.Twobusstoptechnologies(Tirachini,2014TR-A).
▫ Partialeq.(nohousing.nolabor)=>fixedtraveldistance.shorterrun(thane.g.Duranton andTurner).
▫ Possiblymorefavorable forroadexpansionasinduceddemandcouldbehigher
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• Nestedlogitdemandmodel
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The simulation model
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• Realdata
• Congestedbaselinescenario:13-18km/hr
• TwoBS&PTech:frontdoorboardingonly.Similarinitial
speeds.
▫ Inefficient:(A)paymentincash.1berth
▫ Efficient:(B)contactlesscard.2berths.
• Buscorridor:atmostonelane.
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Data european city
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Efficiency Results
Scenario REF SUBref100 CONref DLref CAP SUB100 CON DLSocialBenefit 0 3550 6725 5179 5033 5998 6746 7376CSchange 0 37130 28672 33954 42207 44624 29808 42899
Busfarepeak 0.19 0.00 0.16 0.16 0.17 0.00 0.16 0.16Busfareoff-peak 0.19 0.00 0.16 0.16 0.17 0.00 0.16 0.16Cartollpeak 0.00 0.00 0.62 0.00 0.00 0.00 0.58 0.00
Cartolloff-peak 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Frequencypeak 25 51 50 63 37 47 50 62
Frequencyoff-peak 25 30 24 44 24 28 24 39Bussize 39 35 51 47 37 40 50 39
Carpeakspeed 13 15 22 13 21 21 22 18Buspeakspeed 11 12 15 19 16 15 15 21
Caroff-peakspeed 41 41 41 36 47 45 42 50Busoff-peakspeed 26 25 24 26 28 26 25 28
Peakshare 41 43 41 43 45 45 42 45Off-peakshare 49 48 49 48 46 46 49 46NoTravelshare 9 9 9 9 8 8 9 8Carshare|peak 85 74 61 57 81 74 63 66Busshare|peak 15 26 39 43 19 26 37 34
Carshare|offpeak 84 76 83 79 83 77 83 81Busshare|offpeak 16 24 17 21 17 23 17 19Busstopsperkm 2 2 2 3 2 2 2 3
Numberofbuslanes 0 0 0 1 0 0 0 1RoadCapacity 3600 3600 3600 3600 4662 4355 3706 4446
3Lanes– BS&PTechA
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Efficiency Results• CaseA(lowBS&P)and3lanes
0
1000
2000
3000
4000
5000
6000
7000
8000
SUBref100 CONref DLref CAP SUB100 CON DL
Social Benefit
Without capacity investment With capacity investment
+0,9 lanes
+0,6 lanes
+0,1 lanes
+0,7 lanes
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Efficiency Results• Investinginroadcapacityasauniquepolicyincreaseswelfare• =>TheDowns-Thomsonparadoxdoesnothold
0
1000
2000
3000
4000
5000
6000
7000
8000
SUBref100 CONref DLref CAP SUB100 CON DL
Social Benefit
Without capacity investment With capacity investment
+0,9 lanes
+0,6 lanes
+0,1 lanes
+0,7 lanes
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Efficiency Results• CaseA(lowBS&P)and3lanes
0
1000
2000
3000
4000
5000
6000
7000
8000
SUBref100 CONref DLref CAP SUB100 CON DL
Social Benefit
Without capacity investment With capacity investment
+0,9 lanes
+0,6 lanes
+0,1 lanes
+0,7 lanes
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02000400060008000
100001200014000
+0,9+0,6 +0,1 +0,7
02000400060008000
100001200014000
+0,1+0,0
+0,6+0,9
Case A Case B
• WhathappensifBS&Pisimproved:CaseB• Inallcases,busandcarspeedsarelowandquitesimilaracrossreferencecases
Efficiency Results
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02000400060008000
100001200014000
+0,9+0,6 +0,1 +0,7
02000400060008000
100001200014000
+0,1+0,0
+0,6+0,9
3
Case A Case B
• IfBS&Ptechisimproved,allotherpoliciesworkbetter(this,inadditiontothedirectbenefitsofimprovingBS&Ptech)
Efficiency Results
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02000400060008000
100001200014000
+0,9+0,6 +0,1 +0,7
02000400060008000
100001200014000
+0,1+0,0
+0,6+0,9
3
Case A Case B
• IfKisfixed:Orderofpoliciesdoesnotchange
Efficiency Results
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02000400060008000
100001200014000
+0,9+0,6 +0,1 +0,7
02000400060008000
100001200014000
+0,1+0,0
+0,6+0,9
3
Case A Case B
• Investinginroadcapacityasauniquepolicyalwaysincreaseswelfare=>TheDowns-Thomsonparadoxdoesnothold
Efficiency Results
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02000400060008000
100001200014000
+0,9+0,6 +0,1 +0,7
02000400060008000
100001200014000
+0,1+0,0
+0,6+0,9
3
Case A Case B
• CaseA:Capacityinvestmentisdominated.Buildcapacitybutforbuses(corridor).
• CaseB:improvebusstops,implementapolicyandDONOTexpandroadcapacity
Efficiency Results
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Conclusions• Increasingroadcapacityisefficientbyitselfbutitisnotthebestpolicy
• BS&Ptechiskey:itimprovesthebenefitsofallotherpolicies▫ LowBS&Ptech=>incentivestoinvestinroads,butFORBUSESdosomethingelseadditionally▫ HighBS&Ptech=>bettertoimplementcongestionmanagementpolicies,donotinvestincapacity
• Whatmattersisnotcongestionbut“congestionability”• BS&Pisneverseenasastrategictool.Butitaffectsstrategicdecisions
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Conclusions• Resultsarerobustwithrespecttonetworksize
• Buildcapacityforbuses(corridor)
• WithoptimalK,optimal“congestion”tolliszero.
• “Optimal”subsidyisnegative.
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0
5000
10000
15000
20000
25000
30000
+1,5
+1,2+1,5+1,2
02000400060008000
100001200014000
+0,9+0,6 +0,1 +0,7
Case A
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Conclusions• Resultsarerobustwithrespecttonetworksize
• Manageroadcapacityanddonotbuild.
• Before:congestionpricing.
• After:buscorridors
02000400060008000
100001200014000
+0,1+0,0
+0,6+0,9
05000
1000015000200002500030000
+1,4+1,0
+0,0
+0,0
Case B
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Conclusions
• PreliminaryresultsforU.S.
▫ Buildingcapacityimprovesasastand-alonepolicy
▫ Itcansurpassmanagementpolicies(atref.capacity)
▫ LowBS&P:expandcapacitylessandbuildacorridor
forbuses
▫ HighBS&P:sameconclusion,implementcongestion
management
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Thanks! Questions? Comments?
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