Tuesday, May 6, 2008

Induced Demand, Explained

Atlantic blogger Matthew Yglesias has a nice explanation of why adding additional free roadway doesn't ease congestion, it adds traffic.

A nice quote:

And when you have a valuable commodity that's not priced, over the long run people wind up over-consuming it and creating shortages. If the government set up a "french fries trust fund" to cook that were then given away for free, they'd soon enough run out of french fries. It's the same with the effort to build uncongested highways.

No free fries!

No comments: