CONGESTION DETERIORATION AND PARADOX OF PUBLIC INVESTMENT

Abstract

These days, in metropolitan areas, transportation projects may induce latent demand and deteriorate the average travel time of the areas. In addition, previous papers indicates the existence of the phenomenon that transportation projects deteriorate social welfare. This phenomenon may involve congestion deterioration. This paper analyzes benefits of transportation project by numerical simulations with the model which expresses general equiliblium of two cities. From the results of numerical simulations, this paper explores the condition and mechanism of occurring the congestion deterioration and the social welfare deterioration. Conclusively, this paper suggests the way of transportation project evaluation and urban development under the existence of agglomeration economies and migration.