Effect of induced traffic on feasibility of highway projects using economic analysis: A case study in India

• This work uses travel-cost elasticity and studies the effects of induced traffic for an Indian highway project.
• This work compares the results of travel-cost elasticity with the conventional lane-km elasticity method.
• Travel cost elasticity may be used for calculation of induced traffic.

Induced travel that alters the traffic growth rate of highway projects and their economic impacts has been studied in this paper. Most of the researchers on induced traffic have used the static lane-km elasticity, whereas it is in fact change in travel cost that users react to when the lane-km changes. Hence, this work uses travel-cost elasticity and studies the effects of induced traffic for an Indian highway project in terms of economic impacts and compares the results with the conventional lane-km elasticity method. It has been found from this study that considering induced traffic by both these methods changes the economic indicators by different amounts. Hence, ascertaining the best method by comparing with real traffic counts assumes great importance. This paper also suggests preferring travel cost elasticity as even lane-km indirectly accounts to travel cost savings due to additional lane-km added to the facility.