Ian Savage (2019). Microeconomic Perspectives on US Transportation Infrastructure Challenges and Directions for the 21st Century. In Aman Khan and Klaus Becker (eds.) US Infrastructure: Challenges and Directions for the 21st Century. Pages 123-135. New York: Routledge.
[Link to Book]  [Manuscript Version]

This book chapter describes two major contributions that microeconomic theory and modelling have made to understanding the future direction of infrastructure investment. The first is the trend towards implementing tolling to manage congestion. Pricing of this type ensures that facilities are used more efficiently by spreading out peak traffic. It also generates revenue for any needed expansions in capacity. The second contribution is in understanding how changes in transportation technology and costs may alter the structure of cities and with it the need for infrastructure provision either in the center or on the periphery. There are tantalizing questions concerning whether the advent of autonomous vehicles will lead to greater or lower urban density. Convincing arguments can be made either way. We seem to be at a crossroads in terms of the future structure of cities and the consequent needs for infrastructure provision and rehabilitation.