Systematic Overestimation of Benefits in Appraisals for Road Capacity Expansions

Abstract

This paper examines how the omission of induced traffic in transport modelling leads to systematic overestimation of the benefits of road capacity expansion projects. Using a case study from Copenhagen, the analysis compares appraisals with and without induced traffic effects. Results show that including induced demand significantly reduces estimated travel time savings, increases negative environmental impacts, and lowers the benefit–cost ratio. The findings highlight how ignoring induced traffic can bias project evaluations, leading to misallocation of public funds and insufficient attention to alternative solutions for congestion and environmental challenges.