“Downs's Law” under the lens of theory: Roads lower congestion and increase distance traveled

Abstract

Downs (1962) claimed a “Law”: that expressways lower congestion even though they reach maximum traffic flow. In urban economics since Strotz (1965), road capacity is measured by road width, and congestion as the delay in travel: wider roads lower congestion. Duranton and Turner (2011), in an econometric study, atypically defined congestion, not as delay in travel, but as aggregate vehicle kilometers traveled (VKT) relative to the aggregate length of roads, concluding that roads are unlikely to relieve congestion. We first provide the theory behind “Downs's Law”. Then, in a series of theoretical models, we endogenize rent, income, the value of time, leisure, Marshallian productivity, consumption-linked trips, road costs, spatial detail, and a suburb-to-city expressway competing with existing roads. In each case we prove that adding more road capacity lowers congestion and increases utility in the short run when city population is fixed; and lowers congestion in the long run too despite induced travel or population growth. Aggregate travel cost and VKT rise or fall, depending on how much congestion is lowered, on the cost elasticity of travel demand, on location-based income and substitution effects, and on which roads are widened.