Induced demand

Induced demand, or latent demand, is the phenomenon that after supply increases, more of a good is consumed. This is entirely consistent with the economic theory of supply and demand; however, this idea has become important in the debate over the expansion of transportation systems, and is often used as an argument against increasing roadway traffic capacity as a cure for congestion. This phenomenon, called induced traffic, is a contributing factor to urban sprawl. City planner Jeff Speck has called induced demand "the great intellectual black hole in city planning, the one professional certainty that everyone thoughtful seems to acknowledge, yet almost no one is willing to act upon."

The inverse effect, or "reduced demand", is also true (see below)

Latent demand has been recognised by road traffic professionals for many decades, and was initially referred to as "traffic generation". In the simplest terms, latent demand is demand that exists, but, for any number of reasons, most having to do with human psychology, is suppressed by the inability of the system to handle it. Once additional capacity is added to the network, the demand that had been latent materializes as actual usage.

The effect was clearly seen in the highway-building program of Robert Moses, the "master builder" of New York City. As described by Moses' biographer, Robert Caro, in The Power Broker:

During the last two or three years before [the entrance of the United States into World War II], a few planners had...begun to understand that, without a balanced system [of transportation], roads would not only not alleviate transportation congestion but would aggravate it. Watching Moses open the Triborough Bridge to ease congestion on the Queensborough Bridge, open the Bronx-Whitestone Bridge to ease congestion on the Triborough Bridge and then watching traffic counts on all three bridges mount until all three were as congested as one had been before, planners could hardly avoid the conclusion that "traffic generation" was no longer a theory but a proven fact: the more highways were built to alleviate congestion, the more automobiles would pour into them and congest them and this force the building of more highways – which would generate more traffic and become congested in their turn in an ever-widening spiral that contained the most awesome implications for the future of New York and of all urban areas.

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Wikipedia