Analysis of Metropolitan Highway Capacity and the growth in vehicle miles of travel

A number of recent studies have examined the hypothesis of induced travel in an attempt to quantify the phenomenon (Hansen & Huang 1997; Noland, forthcoming). No study has yet attempted to adjust for potential simultaneity bias in the results. This study addresses this issue by the use of an instrumental variable (two stage least squares) approach. Metropolitan level data compiled by the Texas Transportation Institute for their annual congestion report is used in the analysis and urbanized land area is used as an instrument for lane miles of capacity. While this is not an ideal instrument, results still suggest a strong causal relationship but probably that most previous work has had an upward bias in the coefficient estimates. The effect of lane mile additions on VMT growth is forecast and found to account for about 15% of annual VMT growth with substantial variation between metropolitan areas. This effect appears to be closely correlated with percent growth in lane miles, suggesting that rapidly growing areas can attribute a greater share of their VMT growth to growth in lane miles.