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Transportation: Supply and Congestion

Elsevier Ltd
DOI: 10.1016/b0-08-043076-7/02318-4
  • Communication
  • Economics


Transportation facilities are prone to congestion because of peak loads in travel demand, rigidity of transportation infrastructure and the short-run supply of vehicles, and inability to store transport services. Congestion is exacerbated by the tendency of transportation investment to lag growth in population and travel. Urban road traffic congestion and congestion in air travel impose significant economic costs due to lost time. Because travelers lack incentive to account for the congestion costs they impose on other users, congestion is a negative externality and a case can be made for intervention. Policy instruments include capacity investment, congestion pricing of roads and airport runways, and use of information technology. Increasing usage of telecommunications technology may help to alleviate congestion by reducing peak-period travel demand.

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