This article presents a methodology to determine the optimal intensity of Incident Management (IM) on the road in order to reduce time losses of road users. We combine the probability of time loss because of an incident with the expected average time loss in the cost function of the road user. A new element is that the elasticity of demand is included in the model. The change in welfare because of IM will be overestimated if the elasticity of demand is not included in the model. In a numerical example, we show that this overestimation can increase by up to 30 per cent for roads where the number of road users is close to capacity. Therefore, there can be a risk of overinvesting in IM.