The idea of Induced Traffic (aka Latent Demand) has come up in a couple of places and it's an idea that's confusing at first glance. I think that it's actually not too difficult to understand what exactly it is -- what is hard is predicting just how big an impact it has -- so I thought it would be useful to post some notes about it in one place. Remember, this doesn't come from hemp-wearing tree-huggers, this is the work of economists and traffic researchers. If you're interested, you can look at
this paper (PDF) for a review of the literature.
Induced Traffic says that when you try to solve congestion by increasing the size or speed of roads, the net effect is to increase the total amount of road use to the point that it becomes congested again even if all other factors,
including population, remain the same. And this is because there are trips that people aren't taking on the roads precisely because it is congested; when that improves, now people start taking these extra trips, increasing the total road use until the roads start to get congested again and things level out -- not as bad as it was before, but worse than it had been a short time earlier. And all that
without increasing population.
This is really a special case of what they call Latent Demand: when something gets cheaper, people will buy more of it. Since that's a bit easier to understand, let's start there.
Think about foods that you like - there are some that are "special occasion" foods, because they're too expensive to have very often, you need an excuse. I'm happy to buy a 6-pack pretty regularly, but I'm only going to get a bottle of Moet for an anniversary or an engagement present. It's not that I don't like champers, I just can't afford it. So what would happen if the price of Champagne dropped sharply - say by half - now I might get it much more often. So the amount of champagne getting bought will increase without there being an increase in the number of people buying champagne.
Or think back to when DVD was first introduced - those first players cost upwards of $1500, so hardly anyone had one. People could see it's advantages, especially the high-quality picture and sound (compare it to VHS!), but almost no-one could justify that price. By the time they had dropped to $500, many people had them; once they arrived at sub-$100 and you could get them in BigW, you could safely say that almost everyone had one.
Now, travelling somewhere has it's own kind of costs: apart from things like the petrol, there is the cost of time for the trip and the frustration for being stuck in traffic. There are times that people will decide that the cost is too much sometimes and choose not to drive.
- "Driving into town in the morning is crazy, I'll take the bus"
- "It takes ages to drive to and from AAMI, I'll just stay home and watch it on TV"
- "I could probably get this cheaper at Bunnings, but parking's terrible down there; I'll get it down the street"
- "I'll look for a house close to work, I don't want a long commute"
When you increase the capacity of the roads, you will reduce the congestion at the start. That reduces the cost of driving, and now some of those trips that people had avoided start getting taken. Some people will drive more often, some will drive further, and these extra trips now increase the amount of congestion - not because the number of drivers, or even the number of cars, has increased, but because their amount of road-use has increased. Eventually, things reach an equilibrium again: the cost of driving is less than it was before improving the roads, but more than it was just after you made the improvement. You've lost much of your benefits
before any new people have arrived. When the population does increase, there isn't as much spare capacity as you had thought, and you're back at square one.