Does road expansion induce traffic? An evaluation of Vehicle-Kilometers Traveled in China

Wei Chen () and Henry Klaiber

Journal of Environmental Economics and Management, 2020, vol. 104, issue C

Abstract: This paper estimates the causal effect of urban road expansion on Vehicle-Kilometers Traveled (VKT) in 103 Chinese cities. We develop a novel matching IV strategy to address endogeneity concerns that complements traditional historical infrastructure instruments to provide time-varying identification in a panel data setting. We find that the estimated elasticity of VKT with respect to road length is approximately 1, indicating that newly built urban roads lead to a proportional increase in total traffic. Given significant ongoing infrastructure investment and more recently enacted traffic alleviation policies in many Chinese cities, this result provides important new information on the impacts of infrastructure investment on traffic.

Keywords: Vehicle-kilometers traveled; Road infrastructure; China (search for similar items in EconPapers)
JEL-codes: H54 L62 R41 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:104:y:2020:i:c:s0095069620301108

DOI: 10.1016/j.jeem.2020.102387

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