Impact Evaluation of the Candon Bypass Road Project Using Synthetic Control Method

This study evaluates the impact of the bypass road project in Candon City, Ilocos Sur, on traffic congestion, measured by annual average daily traffic and economic growth, proxied by business tax collection. To assess this effect, this research employed the Synthetic Control Method due to the limited number of cities and municipalities available for comparison with Candon City. Results show that the bypass road helped ease traffic congestion by reducing the annual average daily traffic along the bypassed portion of the Manila North Road by an average of 23.75 percent from 2020 to 2022. The findings also suggest that the project has expanded business activities, as indicated by an 8.65 percent increase in annual business tax income in the city from 2020 to 2022. However, robustness checks for this outcome revealed a strong reliance on a single donor municipality, warranting cautious interpretation. The findings, observed over a short post-treatment period of three years, primarily reflect initial impacts and transitional adjustments. While positive, the observed effects on traffic congestion reduction and business activity increase require further long-term investigation to determine sustainability and fully capture potential medium-term equilibrium effects, such as induced development or spatial relocation along the Manila North Road. Future research should consider the potential for induced travel demand, which may lead to renewed congestion over time.