Induced Supply: A Model of Highway Network Expansion at the Microscopic Level

This paper examines the growth of a network based on the present conditions of the network, traffic demand, other demographic characteristics, project costs, and a budget constraint. The effects of expanding a link on its upstream and downstream neighbors, as well as on parallel links are also considered. Data spans two decades and consists of data on physical attributes of the network, their expansion history and AADT values on each of the links. A non-linear cost model is developed for the Twin Cities Metropolitan Area. Results show that high capacity links are more likely to be expanded and a higher budget result in more links being expanded. Large population in the surrounding region deters two-lane expansion because of the high cost associated with such an expansion but a one-lane expansion is favored. One of the important results of this research is that the rate of network expansion has decreased over the years.