13

# 27.

27. Assumption VI deals with the costs of road construction. These are specified as, K. + wK(S), where K, is a constant term reflecting the incidence of economies of scale in road construction. To simplify the analysis, it is assumed there are constant returns to scale in road construction so that Ko is equal to zero. The author recognizes this assumption is unrealistic, since there are substantial economies of scale in constructing non-urban roads up to four lanes. This is illustrated in figure 2; it is based on empirical data trom several countries and is equally applicable to Tunisia. In urban areas, on the other hand, rising land values increases the average cost function and this decreases the effect of increasing returns to scale. The two effects may therefore cancel out in urban areas and the assumption of constant returns to scale may be reasonable (Newbery, 1987, p. 9; Small et al, 1989, pp. 101-102). However, urban roads in developing countries generally account for less than 20 percent of the paved road network and perhaps 10 percent of the classified network (the figures for Tunisia are 19.1 percent and 10.5 percent respectively) (Paterson, 1985) and even in developed countries they still only account for between 18 percent (USA) and 47 percent (W. Germany) of the total road network (Annual Bulletin, 1986, Table 11). When applied to an entire road network, the assumption of constant returns to scale in road construction is therefore too strong.

# 28.

28. Assumption VII assumes that the time costs associated with traffic congestion are homogeneous of degree zero in N and w. In other words, if the volume of traffic doubles and the number of lanes is doubled, vehicle speeds will remain the same. This is unfortunately untrue. Regardless of whether road capacity is compared on the basis of constant speeds, or constant levels of service (LOS), which describe how the interactions between vehicles affect road speeds and capacity, it is clearly not directly related to the number of lanes. The relationship between these two quantities is illustrated in Figure 3. It is based on generic data and therefore applies to all countries, including Tunisia. The continuous lines refer to constant speeds and the broken lines to constant levels of service. On an uncongested inter-urban road **(Raverage sneed** _'SR_ mph, or LOS = A), the capacity of a four-lane road is 4.6 to 5.0 times that of a two-lane road and over 30 times that of a single-lane road. With moderate congestion (average speed 52 mph, or LOS = C), the ratio falls to 2.7 to 3.5 and 18 to 23 respectively, and only approaches 2.0 on roads with two or mcre lanes experiencing serious congestion (average speed 45 mph, or LOS = E), or on roads with more than four lanes. Since a relatively small proportion of the road network in most countries will be seriously congested, or exceed four-lanes (in Tunisia there are no roads over four lanes) (Paterson, 1985), the assumption that time costs are homogeneous of degree zero is too strong.

29. Finally, assumption mII assumes that road capacity can be smoothly adjusted to traffic. In other words, roads are assumed to be infinitely divisible and are always operating at their optimal capacity. This is an important weakness. Roae investments are inherently lumpy, at least at the network level, and although there is scope fo increasing road capacity at the margin, particularly in urban areas (Starkie, 1982), the main increments in capacity - from one lane to two and from two to four - can only be added in indivisible lumps. This means that much of the road network will be operating well below **:Is** optimal capacity and congestion