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Does road expansion induce traffic? An evaluation of Vehicle-Kilometers Traveled in China

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  • Chen, Wei
  • Klaiber, H. Allen

Abstract

This paper estimates the causal effect of urban road expansion on Vehicle-Kilometers Traveled (VKT) in 103 Chinese cities. We develop a novel matching IV strategy to address endogeneity concerns that complements traditional historical infrastructure instruments to provide time-varying identification in a panel data setting. We find that the estimated elasticity of VKT with respect to road length is approximately 1, indicating that newly built urban roads lead to a proportional increase in total traffic. Given significant ongoing infrastructure investment and more recently enacted traffic alleviation policies in many Chinese cities, this result provides important new information on the impacts of infrastructure investment on traffic.

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  • Chen, Wei & Klaiber, H. Allen, 2020. "Does road expansion induce traffic? An evaluation of Vehicle-Kilometers Traveled in China," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    • Handle: RePEc:eee:jeeman:v:104:y:2020:i:c:s0095069620301108
    DOI: 10.1016/j.jeem.2020.102387
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    More about this item

    Keywords

    Vehicle-kilometers traveled; Road infrastructure; China;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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