This paper presents a new continuum traffic flow theory. The derivation of this new theory is based on both empirical evidence of traffic flow behavior and basic assumptions on drivers' reaction to stimuli. Central to the development of this theory is the existence of an equilibrium speed-concentration relationship and an introduction of a disturbance propagation speed. The new theory includes a well established continuum theory (the LWR theory) as a special case and removes certain deficiencies of this theory. Unlike existing higher order continuum models, the new theory does not exhibit the undesirable behavior of 'wrong-way travel' because in this theory traffic disturbances are always propagated against the traffic stream.
