Publication: Journal of Economic Education
Volume: Volume 35, No. 3
Issue: Summer 2004
Pages: 295-303
Author(s): Sarah B. Eckenrod (U.S. General Accounting Office) and William L. Holahan (University of Wisconsin-Milwaukee)
Address (Principal Author):William L. Holahan
Professor and Chair
Economics Department
University of Wisconsin-Milwaukee
Bolton Hall
Milwaukee, WI 53211
Phone: (414) 229-4811
Fax: (414) 229-3860
Internet Address (Principal Author): holahan@uwm.edu
Title: Teaching the Economics of Urban Sprawl in the Principles of Economics Course
Abstract: Employing the concepts of congestible public goods, the authors explain that underpriced road usage leads to an inefficiently large proportion of the population moving farther from the cities. Increased demand for highway usage leads to expansion of the roads, according to common public policy, which reduces the price of using the road even lower than its already inefficient price. Given time to adjust to the lower price of travel, peak demand becomes more elastic and drivers shift away from the inconvenient off-peak to the now relatively cheaper peak alternative.