University of California Transportation Center

Since traffic information is indirectly priced and experiences significant economies-of-scale, it can not be described by the classic demand model normally used to explain most goods. Therefore, this report focuses on the derivation of a demand model that describes the supply and cost mechanisms influencing the market for traffic information. This study includes a discussion of the history of the market, its economies-of-scale, and its potential for future development. In addition, recent developments of value-added-resellers, the differences which exist in the marketing of their products, and some factors influencing their success in the market for traffic information will also be discussed. Several suggestions for both the commercial broadcast stations and the public agencies that aim to maximize the total benefits of traffic information are presented.