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What Is Induced Demand?

“If you build it, they will come.”


San Fernando Valley

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When roadways are expanded to meet higher capacities of traffic, traffic volumes will rise and congestion will quickly return to similar levels. That’s the concept behind ‘induced demand,’ an increasingly provable yet counterintuitive idea that counters traditional wisdom in transportation planning.

One of the least understood concepts in transportation planning, induced demand holds that increased roadway capacity releases pent-up “latent demand” that was suppressed for a variety of potential reasons. For example, providing a good or resource at reduce or no cost creates an incentive for use. In the case of roads, that means that wide, open roads present incentives for drivers to use personal vehicles, thus leading to more vehicle trips than prior to roadway expansion. In this sense, traffic is more comparable to a gas than to a liquid—meaning that as more lanes become available, more drivers will fill them. Because there are almost always more drivers and cars waiting to be used—especially in the United States, where car ownership is ubiquitous—widening roadway capacity will only lead to higher traffic volumes. When roadways are expanded, more drivers choose to take trips at peak hours or use their cars when they might otherwise take another mode, go to a closer establishment, or omit the trip altogether. A 2009 study by Matthew Turner and Gilles Duranton showed an “almost perfect correlation” between lane miles built and vehicle miles driven. In economics, this concept is also called “demand elasticity.”

As far back as the 1930s, planners observed the effects of induced demand as builders such as Robert Moses constructed more and more roads and bridges, only to see congestion return. As Robert Caro writes in his Moses biography The Power Broker, “every time a new parkway was built, it quickly became jammed with traffic, but the load on the old parkways was not significantly relieved.” In 1962, economist Anthony Downs coined the "Law of Peak-Hour Expressway Congestion": “on urban commuter expressways, peak-hour traffic congestion rises to meet maximum capacity.” According to Transportation For America, vehicle miles traveled (VMT) increased by 46 percent between 1980 and 2017.

The phenomenon has massive implications for transportation planning and policy. The theory of induced demand asserts that as roadways become wider and able to accommodate higher volumes of traffic, additional vehicles will materialize as drivers feel incentivized to use the expanded road due to the belief that added lanes have reduced congestion. As more people start driving on the expanded road, congestion levels will increase to similar levels as before road widening. Los Angeles’ notorious Interstate 405 provides one of the most infamous examples of induced demand. After a $1.6 billion expansion project that caused severe disruption to the area over five years, data shows unimpressive results when it comes to congestion relief. Researchers also point to the external effects of generated traffic, such as increased air pollution and accident rates. Expanded roadway capacity to peripheral areas can, over the long term, affect development patterns, encouraging sprawl and automobile dependency.

Yet changing the political support for roadway expansion remains a hard sell. A study in the journal Transportation found that 64 percent of Americans surveyed believed that road widening has positive effects on congestion. Even after reading an explanation of the phenomenon, most people revert to their prior opinion after a few months.

The problem extends beyond ordinary citizens. Even traffic engineers avoid the topic, with many engineering students unlikely to have any knowledge of the concept. Meanwhile, changing consumer demand for private vehicle trips isn’t just about roadway planning. Experts like Donald Shoup tout the benefits of parking reform, highlighting the role of free or low-cost parking in inducing vehicle trips and perpetuating driving habits.

State departments of transportation and local leaders continue to fund road widening efforts despite mounting evidence of their futility. Actual solutions to congestion include freeway removal (reducing supply), congestion pricing, and toll lanes—all tactics unlikely to gain the support of the general public. With congestion relief a popular and evergreen political promise, planners face an uphill battle convincing policymakers to implement effective, but unpopular, strategies like congestion pricing rather than highway expansion.

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