Road supply and traffic in California urban areas

We estimate relationships between the supply of state highways, measured in lane-miles, and the quantity of traffic, measured in vehicle-miles traveled, for urban counties and metropolitan areas in the state of California. The analysis employs a panel data set of annual observations for the years 1973 to 1990. We estimate several versions of a log-linear model including fixed regional and time period effects. Our main concern is with models of state highway (as opposed to total) vehicle-miles traveled. By using two types of models designed to capture long-term effects, we estimate that state highway vehicle-miles traveled has a lanemile elasticity of 0.6-0.7 at the county level and 0.9 at the metropolitan level, and that the full impact of vehicle-miles traveled materializes within five years of the change in road supply. We also consider limited data on off-state highway vehicle-miles traveled, and find no conclusive evidence that increases in state highway lane-miles have affected traffic on other roads. Population, income, and gasoline price elasticities are also discussed. We find that, even when all these factors are accounted for, there has been a sharp increase in the propensity towards vehicle travel over the period of study, particularly during the late 1980s.