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Yep. And the government fixes the price of using a road at $0, causing the induced demand issue. A limiting factor of supply (how many cars are currently using
by timerol 7y ago
Yep. And the government fixes the price of using a road at $0, causing the induced demand issue. A limiting factor of supply (how many cars are currently using the road) is completely ignored when setting the price.
The cost of constructing roads is handled by other taxes, but that doesn't change that the roads themselves need to be priced higher to not have shortages.
- dragonwriter 7y ago> And the government fixes the price of using a road at $0, That's arguably true of electric vehicles, but ICE engines pay road user fees by way of gas taxes, which are nonzero and related (imperfectly, sure) to road impact. > causing the induced demand issue. I think induced demand is not really a road price issue: more road access -> more desirability to attractive businesses -> more demand (at the same price) for road use. Now, if you charged higher road prices instead of building more roads, to reduce traffic, you'd avoid induced demand by avoiding attracting business and raise revenue, it's true, but the induced demand isn't a product of $0 road cost (which isn't a thing, mostly) but of increased ease of access from the short-term effect of more roads.
- triceratops 7y agoI wasn't arguing that induced demand is a product of $0 road cost. It's a product of lower time cost - new roads decrease congestion (temporarily) and induce the higher demand. Eventually the new roads are as congested as the old ones.