Friday, July 22, 2011

Carmageddon or More evidence on Downs paradox

So apparently, Carmageddon was supposed to be last weekend in LA when they shut down a highway for the weekend for repairs. And apparently not much happened. The big economics lesson I take away from here is more evidence for the Downs paradox which basically argues that in many cases highway capacity has no effect on travel time. People adjust their driving habits to the amount of highway capacity available. Lots of recent research seems to back this up as well. The marginal effect of building an extra lane of highway on travel time is zero, since more highway capacity just causes more people to use the highway until the same equilibrium travel time is reached.
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