A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand

TLDR

Road congestion at peak load is commonly modeled, but standard models are ambiguous and poorly specified, motivating a structural approach that explicitly incorporates congestion technology and consumer behavior. The study aims to eliminate these ambiguities by adopting a structural framework that explicitly incorporates congestion technology and drivers’ behavioral decisions. The authors analyze William Vickrey’s bottleneck congestion model for the morning rush‑hour commute, extending it to elastic (price‑sensitive) demand and exploring its economic implications. JEL R41.

Abstract

This paper considers the modeling of road congestion subject to peak-load demand. The standard model contains ambiguities and is poorly specified. These problems can be eliminated by working with a structural model that explicitly treats the congestion technology and drivers' behavioral decisions. The paper provides a detailed analysis of a particular structural model -William Vickrey's model of bottleneck congestion in the morning rush-hour auto commute, extended to treat elastic (i.e., price-sensitive) demand -and examines some economic implications of the structural approach. (JEL R41) This paper considers the modeling of road congestion subject to peak-load demand. It argues that a properly specified model should be structural, that is, be derived explicitly treating the congestion technology and consumers' behavioral decisions. The standard model of a facility subject to peak-period congestion is specified as