HOV lanes reduce traffic and cut costs, right? Not always, economists find
While HOV lanes have become an integral part of our nation’s highway systems, a study by two University of Colorado Boulder economists indicates that the traffic-congestion tool can cause unintended consequences—like drawing more drivers away from alternative transit and to roads that drivers perceive to be less congested.
Some 345 highways have High-Occupancy-Vehicle Lanes, the U.S. Department of Transportation reports; these lanes are built in the hope that they will promote carpooling, reduce traffic congestion and improve air quality. The CU Boulder researchers find that, depending on the volume of traffic, those benefits might either be realized or negated by other factors.
“Because costs vary substantially across routes, hours and days, current policies to promote carpooling will often increase social costs,” Jonathan Hughes, an associate professor of economics at CU Boulder, writes in a recently published paper. “It’s really about this: Given that we have HOV lanes, how should we use them?”
Hughes published the study, “When Should Drivers Be Encouraged to Carpool in HOV Lanes,” in the January edition of Economic Inquiry, along with co-author Daniel Kaffine a professor of economics at CU Boulder. They looked at 10 years of data from six crowded highways with HOV lanes in the Los Angeles area, observing average vehicle speed and hourly flow rates at nearly 600 locations on the city’s major highways.
“Drivers minimize their costs,” Hughes said. “That’s largely the time you spend in traffic. But what happens when you have any kind of policy change is then drivers re-optimize.”
“When considering any policy that affects road congestion, it’s important to think about both the current users of the road as well as the potential users who may start driving due to reduced congestion,” Kaffine added in a recent interview.
When HOV lanes reduce traffic on the main traffic lanes, more drivers will choose to use the highways, rather than alternative routes, public transportation or staying home, because the cost (time spent stuck in traffic) has been reduced."
Changes in congestion can lead to what highway designers call induced demand. Essentially, that means that when HOV lanes reduce traffic on the main traffic lanes, more drivers will choose to use the highways, rather than alternative routes, public transportation or staying home, because the cost (time spent stuck in traffic) has been reduced.
“On average, encouraging HOV lane use is beneficial for moderate levels of induced demand,” the study states. “However, there is substantial variation across and within routes.”
For instance, the study notes that with a moderate amount of induced demand, policies to promote carpooling in HOV lanes would increase congestion in seven of the 12 California highways during daily peak hours.
“While it’s theoretically possible induced demand negates the benefits of promoting carpooling, the approach we’ve taken here is to use real world data to see how likely it is to happen” Hughes said. “We find that it matters, and the effects can be quite substantial.”
The study mainly looks at consumer behavior in terms of cost, noting that across the nation the external costs of traffic congestion are about $120 billion per year. But the study also looks at the problem from the standpoint of policy makers, who might consider other vehicle-related externalities such as local air pollution, climate change and accidents.
“We chose California, like a number of traffic studies, because they have lots of HOV programs and really great data,” Hughes said. Although most highways have the real-time congestion data used in the study, Hughes said the duo has not yet been successful in getting the necessary data from the Colorado Department of Transportation to do a similar study here.
However, Hughes believes there are lessons for CDOT that can be applied here. “There are some places where it is really costly to form a carpool, in terms of added time or hassle. These are places where encouraging carpooling can make more sense.” Hughes believes that he and Kaffine have provided the necessary economic framework to study these issues.