Economic Development Impacts of Transportation Demand Management

Transportation Demand Management (TDM) includes a variety of strategies that encourage more efficient use of transportation resources. This paper examines the economic development impacts of TDM. It investigates the optimal level of motor vehicle use, and the degree to which TDM strategies that reduce automobile travel are justified based on economic principles. This paper identifies various market distortions that result in economically excessive automobile travel. Many TDM strategies represent market reforms that correct these distortions by improving transportation options and competition, efficient pricing, and more neutral planning and tax policies. It summarizes research on the economic development impacts of various transportation investments and management policies. This analysis suggests that TDM strategies can increase economic productivity and development, and are often better investments than capacity expansion projects. However, TDM policies and programs must be well planned to provide maximum economic development benefits.