page_title: Traffic congestion
section_title: Economic theories
hierarchical_section_title: Traffic congestion / Causes / Economic theories
caption_attribution_description: English: Traffic jam at 17:30 downtown Haikou City, Hainan Province, China.
context_page_description: Traffic congestion is a condition on transport that is characterised by slower speeds, longer trip times, and increased vehicular queueing. Traffic congestion on urban road networks has increased substantially since the 1950s. When traffic demand is great enough that the interaction between vehicles slows the speed of the traffic stream, this results in some congestion. While congestion is a possibility for any mode of transportation, this article will focus on automobile congestion on public roads.
  As demand approaches the capacity of a road, extreme traffic congestion sets in. When vehicles are fully stopped for periods of time, this is known as a traffic jam or a traffic snarl-up. Traffic congestion can lead to drivers becoming frustrated and engaging in road rage.
  Mathematically, traffic is modeled as a flow through a fixed point on the route, analogously to fluid dynamics.
context_section_description: Congested roads can be seen as an example of the tragedy of the commons. Because roads in most places are free at the point of usage, there is little financial incentive for drivers not to over-use them, up to the point where traffic collapses into a jam, when demand becomes limited by opportunity cost. Privatization of highways and road pricing have both been proposed as measures that may reduce congestion through economic incentives and disincentives. Congestion can also happen due to non-recurring highway incidents, such as a crash or roadworks, which may reduce the road's capacity below normal levels.
  Economist Anthony Downs argues that rush hour traffic congestion is inevitable because of the benefits of having a relatively standard work day. In a capitalist economy, goods can be allocated either by pricing (ability to pay) or by queueing (first-come first-served); congestion is an example of the latter. Instead of the traditional solution of making the "pipe" large enough to accommodate the total demand for peak-hour vehicle travel (a supply-side solution), either by widening roadways or increasing "flow pressure" via automated highway systems, Downs advocates greater use of road pricing to reduce congestion (a demand-side solution, effectively rationing demand), in turn plowing the revenues generated therefrom into public transportation projects.
  A 2011 study in The American Economic Review indicates that there may be a "fundamental law of road congestion." The researchers, from the  University of Toronto and the London School of Economics, analyzed data from the U.S. Highway Performance and Monitoring System for 1983, 1993 and 2003, as well as information on population, employment, geography, transit, and political factors. They determined that the number of vehicle-kilometers traveled (VKT) increases in direct proportion to the available lane-kilometers of roadways. The implication is that building new roads and widening existing ones only results in additional traffic that continues to rise until peak congestion returns to the previous level.
caption: Rapid economic growth in China has resulted in a massive increase in the number of private vehicles in its major cities. Shown here is a traffic jam in downtown Haikou, Hainan Province, China.
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