Do Bigger Roads Cause More Cars… and Business?


In an exchange on Twitter, James Kennedy cited an Adam Mann article in Wired suggesting that building bigger roads produces more cars, keeping traffic roughly the same.  The point, for activists, is that building more roads doesn’t relieve traffic and, conversely, reducing roadways doesn’t result in increased traffic:

The concept is called induced demand, which is economist-speak for when increasing the supply of something (like roads) makes people want that thing even more. Though some traffic engineers made note of this phenomenon at least as early as the 1960s, it is only in recent years that social scientists have collected enough data to show how this happens pretty much every time we build new roads. These findings imply that the ways we traditionally go about trying to mitigate jams are essentially fruitless, and that we’d all be spending a lot less time in traffic if we could just be a little more rational. …

The answer has to do with what roads allow people to do: move around. As it turns out, we humans love moving around. And if you expand people’s ability to travel, they will do it more, living farther away from where they work and therefore being forced to drive into town. Making driving easier also means that people take more trips in the car than they otherwise would. Finally, businesses that rely on roads will swoop into cities with many of them, bringing trucking and shipments. The problem is that all these things together erode any extra capacity you’ve built into your street network, meaning traffic levels stay pretty much constant. As long as driving on the roads remains easy and cheap, people have an almost unlimited desire to use them.

The conclusion that one can draw is that people’s perceived cost for sitting in traffic is roughly equivalent to the profit or benefit that they would realize by being able to get where they would go if it were easy to do so.  This isn’t some mystical power of roads, though.  Note that the researchers whom Mann cites, Matthew Turner and Gilles Duranton, didn’t convince cities to expand and reduce roadways as a pure experiment.  Rather, they looked at cities that undertook the projects of their own accord, which suggests that the local communities had some sense that there was strong demand to build new roads or insufficient demand to maintain current roads.

Such decisions are more are than science, but this is what economics does and why the free market is such an efficient framework in which to balance competing goods that would be impossible to price.

Even putting that aside, though, step back from the narrow topic of traffic, and you see something remarkable: Expanding the roadways makes people more active for personal and business purposes.  The second paragraph quoted above describes a city that expands its roads without relieving traffic, but it adds businesses that “swoop in.”  That’s not a bad trade and, from the perspective of Rhode Islanders, is something to be envied.

I’d take a different view, though, and suggest that building roads doesn’t produce new businesses out of thin air.  Rhode Island’s traffic isn’t bad, by urban standards, so it’s clearly not what’s restraining economic growth.  But if we start reducing roadways, we’d only be adding to the disincentives for the economy to expand much more.

  • ShannonEntropy

    But if we start reducing roadways, we’d only be adding to the disincentives for the economy to expand much more.

    You mean like that idiotic plan to turn the 6-10 Connector into a “boulevard” ??

    Since there are only a limited number of ways to go east-west in this State ,, exactly where are all the vehicles who use that road now gonna go ??