Mitigating Traffic Congestion: The Role of Intelligent Transportation Systems

Mitigating Traffic Congestion: The Role of Intelligent Transportation Systems Zhi (Aaron) Cheng, Min-Seok Pang, Paul A. Pavlou While massive investments in transportation infrastructure, traffic congestion remains a major societal and public policy problem. Intelligent transportation systems (ITS) have been proposed as a potential solution to this challenge, but their effectiveness has remained unclear. To examine whether and how ITS affect traffic congestion, we study traffic congestion and the deployment of a large federally supported ITS program in the United States—511 systems—in 99 urban areas between 1994 and 2014. We find that the adoption of 511 systems is associated with a significant decrease in traffic congestion, saving over $4.7 billion dollars and 175 million hours in travel time annually in U.S. cities. 511 systems also reduce about 53 million gallons of fossil fuel consumption and over 10 billion pounds of CO 2 emissions. We show abundant evidence that ITS help individual commuters to make better travel decisions, and that ITS help local governments to develop an urban traffic management capability. We also observe that the traffic-reducing effect of ITS is larger with more actual usage of the online services and when state and local governments incorporate more informative functionalities into the 511 systems. This study informs policymakers of ITS as a cost-effective means to mitigating traffic congestion. Despite massive investments in transportation infrastructure, traffic congestion remains a major societal and public policy problem. Intelligent transportation systems (ITS) have been proposed as a potential solution to this challenge, but their effectiveness has remained unclear in both research and practice. To understand whether and how ITS affect traffic congestion, we consolidate a unique longitudinal data set on road traffic and the deployment of a large federally supported ITS program in the United States—511 systems—in 99 urban areas between 1994 and 2014. The difference-in-differences estimates show that the adoption of 511 systems is associated with a significant decrease in traffic congestion, saving over $4.7 billion dollars and 175 million hours in travel time annually in U.S. cities. 511 systems also reduce about 53 million gallons of fossil fuel consumption and over 10 billion pounds of CO 2 emissions. We offer two theoretical explanations for this effect: (i) ITS help individual commuters to make better travel decisions,