Highway Widenings, Traffic Conditions and Economic Activity

Highway construction occurs nowadays mainly through widening of existing roads rather than through building of new roads. We study the universe of highway widenings in the Netherlands in 1991-2018. We distinguish between local and regional effects and identify effects up to 6 years after widenings. We exploit that the exact timing of the widenings is highly random. Highway widenings induce large local traffic effects: speed increases with 25% and traffic flow goes up by 30% on widened segments. These effects are persistent during up to 6 years after the widening. At the regional level, we document yearly increases in traffic volume after the widening. Highway widenings also induce a relocation of local employment to places near the highway, but do not affect other types of economic activity. Our study contributes to the ongoing public discussion about the effects of highway construction. Joint with Jos van Ommeren and Henk van Mourik.