9 ms·

Induced Demand Is Real

31 points by dedalus 5y ago

tus666 5y ago
demand != consumtion
- hef19898 5y ago
  Well, for all but the most detailed discussions around forecasting and demand management those terms are interchangeable.
robertlagrant 5y ago
Calling the demand "induced" seems a little strange. Did creating the iPhone induce demand for iPhones that otherwise would not have been there? Was there pent up demand for iPhones that was sated by their creation? Or did people like the utility of iPhones, and buy them in spades? In the same way, it seems strange to term things induced/pent up demand. Increased road capacity means people could plan more car trips without worrying about sitting in traffic.
- malermeister 5y ago
  Increased road capacity means more people plan car trips and end up setting in traffic :-) Traffic is people, if you increase road capacity, you'll just have more people taking the road until it's full enough for everyone to be stuck again.
- oneoff786 5y ago
  The creation of a new good isn’t really an example of this effect. This is discussing systems that are basically stable, then new supply causes a higher quantity demanded. iPhones aren’t really supply limited. The traffic example is salient.
- a4isms 5y ago
  > Increased road capacity means people could plan more car trips without worrying about sitting in traffic. You've got it in one. People think that the biggest highway with the most lanes will mean less sitting in traffic, so they plan their trips to include it. People think that a satellite city connected to the big city with a big highway will have a short car commute, so they choose to live there. This kind of thinking induces demand until the experience of sitting in traffic for an hour on one of the widest highways in the world—like Ontario's 401—discourages people from taking the highway. So politicians spend billions widening the highway some more. Lather, rinse, repeat.
  - jjoonathan 5y ago
    Right, but this usually turns into the argument that we shouldn't add new capacity because then it would be used, and that's such a staggeringly stupid argument that I cannot comprehend the confusion of ideas that would lead someone to embrace it. What's worse, I hear this awful argument deployed under the flag of a cause I believe in: more public transport, less roads. Guess what? If we deploy more public transport, I bet people will use it more, too! Does that mean we shouldn't? Ugh. It's so dumb it almost feels like it has to be a false flag, but I've heard it from people who I know believe what they say, so I think it's just a meme at this point. A pejorative that people throw at cars without thinking about what they are saying. "Cars are bad at scaling throughput" is the argument we need. Not this "induced demand" garbage.
    - a4isms 5y ago
      "but this usually turns into..." You're arguing with someone who isn't present. If and when someone makes that argument here, you can refute the argument they actually make, rather than the one in your own head. Until then, you're actually arguing with your own personal straw-man. Also, and this is an actual thing in the HN guidelines, when you do argue, calling ideas staggeringly stupid and so forth is strongly discouraged.
      - jjoonathan 5y ago
        You're just declining to engage because you know I'm right :) Fair enough.
        deleted 5y ago
        [deleted]
        a4isms 5y ago
        Again, you're making things up. I never said that, I didn't even say you were wrong. I actually said you were not even wrong, and I'll say it again here: When you decide for yourself what somebody else might say—but hasn't said, or decide for yourself why you think somebody didn't say something, you're arguing with yourself. "Not even wrong" has a very specific meaning here, it means arguing from speculative premises that cannot be falsified. Like, "But other people will argue X," or, "You declined to engage because Y." Both of these statement forms are not even wrong. https://en.wikipedia.org/wiki/Not_even_wrong https://en.wikipedia.org/wiki/Not_even_wrong
- simonh 5y ago
  > Was there pent up demand for iPhones that was sated by their creation? Yes, correct. That’s spot on. A lot of people were crying out for a powerful, capable, usable mobile computer to access email, the web and use applications on the go. The mobile networks had invested billions building network capacity to meet these needs. This is why there were huge queues for the very first iPhone before hardly anyone had even touched one. The mobile industry had been full of speculation about what devices we would use on these networks, how they might work and what they would look like. Before the iPhone was even announced I could tell you very clearly what I needed a mobile device to be able to do for me, but not how it would do it. Apple figured that bit out. Think about it this way. If latent demand didn’t exist, how could Apple have figured out what device to design? How could they select the features and capabilities and prioritise them? They had to target a market, even though that market didn’t exist yet. Without thinking about latent demand that sort of novel product development would be just random feature selection and then see what gets traction. For sure some companies do that, but not all. Some of them think it through and target a market they hypothesise exists.
  - robertlagrant 4y ago
    Well, it didn't have applications when it came out. You're retrofitting history with your argument, instead of keeping your argument to history. The iPhone was terrible at everything when it came out except capacitive touch and coolness. That's fine, but let's not pretend otherwise. Terming "people wanting to buy something better/cool" as latent demand is silly. It's a new/cool thing. There's no need to pretend there's anything latent about it. Make new shiny; people buy new shiny. And that's just for Apple. Most products require massive amounts of marketing to explain to people why they should be bought. That wouldn't be needed in a world with latent demand, just waiting to be fulfilled.
- throw0101a 5y ago
  > Did creating the iPhone induce demand for iPhones that otherwise would not have been there? Was there pent up demand for iPhones that was sated by their creation? Invention is the mother of necessity. — Marshal McLuhan > In the same way, it seems strange to term things induced/pent up demand. Increased road capacity means people could plan more car trips without worrying about sitting in traffic. Until that new capacity is filled up and now you have even more people sitting in traffic. The only way to reduce traffic is to get people out of cars, otherwise you're just spending money to kick the can down the road. See "What People Get Wrong About Induced Demand" by the Oh The Urbanity! channel: * https://www.youtube.com/watch?v=8wlld3Z9wRc https://www.youtube.com/watch?v=8wlld3Z9wRc Also "Does Induced Demand Apply to Housing?": * https://www.youtube.com/watch?v=c7FB_xI-U6w https://www.youtube.com/watch?v=c7FB_xI-U6w
- TheCoelacanth 5y ago
  If you gave away iPhones for less than the cost of producing them, like we do with roads, then yes, that would induce demand for iPhones.
  - robertlagrant 4y ago
    That isn't the scenario. Also it's not true; people don't buy things they don't want, even if they're below cost, unless they want to sell them for more. That's not wanting the product; just the profit.
- Bancakes 5y ago
  All the technology iPhones provided already existed. People just fell for the marketing
wffurr 5y ago
What's with the editorialized title? The linked Wikipedia article is just titled "Induced Demand". That should be the HN title as well; OP please fix the title to match the linked page. If you want to then post a common with your view or reason for posting, that sounds great too. Then we can discuss it.
throwaway22032 5y ago
- nickff 5y ago
  I agree with you, it's a way of pejoratively referring to elasticity of demand.
  - deleted 5y ago
    [deleted]
  - afiori 5y ago
    why is it pejorative? I think there is a change in focus, daily car trips are elastic in gas/toll prices and induced by lack of congestion.
    - nickff 5y ago
      Congestion is a non-pecuniary cost, so there's no reason to use a different term. Every time I hear someone use the words 'induced demand', it is meant to indicate that it should be reduced/prevented; I know someone who works in Vancouver's city planning department, and uses the term in this way.
- riffic 5y ago
  I love how anyone can leave their two cents on this site, even for subjects they have absolutely no credentials on (you're answering on a throwaway so that's another strike against your expertise). I would personally reserve that for the folks who actually study the problem space, but whatevs.
  - nickff 5y ago
    Please post a substantive reply, instead of a shallow dismissal. If you have no substantive reply to the parent commenter, it would be best to refrain from commenting. As per the HN Guidelines: >"When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."" >"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
donatj 5y ago
The end goal of adding lanes to a freeway shouldn't be to "reduce congestion" but increase total throughput. Seems like a pretty basic misunderstanding. Adding lanes also has the effect of more lane changes, which are a big part of what slows traffic down to begin with.
- forgetfulness 5y ago
  If we're going to put it in computery terms, latency matters. People want decreased latency for themselves, not just to be in the company of more people sitting in the same traffic jam.
motohagiography 5y ago
Trying to remember an adage on nanog back in the day about why ISPs should provision 2x average capacity, and how traffic in the 1990s expanded to fill the bandwidth available to it. If I remember, it was about only making extra circuits available for burst traffic, and not available otherwise. At the time I remember thinking this had obvious paralells to road traffic. It sounds closely related to Parkinson's Law about work expanding to fill time allotted to it (https://en.wikipedia.org/wiki/Parkinson%27s_law https://en.wikipedia.org/wiki/Parkinson%27s_law) which links back to the OP. For express traffic, I've often thought periodically tapering off passing lanes using painted lines and forcing drivers who passively drive in them back into the active flow of traffic would increase the average speed and consistency of flow for related reasons and the idea of "smooth is fast." Physical dynamic traffic shaping, essentially. Adding complexity or even randomness to interrupt the dynamics that induce the increased demand would be a design consideration. I'd wonder where network protocol design ends and car traffic engineering begins, or if they are essentially the same thing.
rel2thr 5y ago
Urbanists way overstate the importance of induced demand and make it seem like gospel truth that adding roads is pointless I went down the rabbit hole of induced demand studies a few years back, the evidence for the idea that adding lanes or roads does not reduce congestion is pretty weak. There just aren't that many roads being built, theres a ton of confounding factors ( population growth ) , and even some of these studies like the A&M one in this wikipedia are mixed.
lostdog 5y ago
I prefer to think of it as either unmet or unsurfaced demand. It's easier to think about the two places where "induced demand" shows up in arguments: traffic and housing. For traffic and housing there's tons of people who would drive more or live somewhere dense if more roads/housing were provided. The big difference is whether the demand is exhaustible. For roads it's not: you would have to pave all of LA into a freeway system to eliminate traffic. Housing might be different though. Densifying the region around the downtown could outpace the influx of people. The difference is whether trying to exhaust the demand leads to a pleasant collection of neighborhoods or a 60-lane freeway hellscape.
99_00 5y ago
These ideas were popular when real estate developers wanted to build and sell a lot of downtown/centrally located condos. As downtowns run out of land and demand declines (because of work from home and the decline of downtowns) a new business plan will be created and a new ideology will be developed to support it. I just want to know what it'll be so I can front run it. Anyone have any idea?
wrnr 5y ago
No one has mentioned Breass's Paradox yet: https://www.youtube.com/watch?v=cALezV_Fwi0 https://www.youtube.com/watch?v=cALezV_Fwi0 This also happens in simple physical systems, as shown in the video later on.
- riffic 5y ago
  never knew this was a thing to be honest, but this is fascinating and worth exploring further (and I'm not even a planner).

31 points by dedalus 5y ago

tus666 5y ago

demand != consumtion

hef19898 5y ago
Well, for all but the most detailed discussions around forecasting and demand management those terms are interchangeable.

robertlagrant 5y ago

Calling the demand "induced" seems a little strange. Did creating the iPhone induce demand for iPhones that otherwise would not have been there? Was there pent up demand for iPhones that was sated by their creation? Or did people like the utility of iPhones, and buy them in spades? In the same way, it seems strange to term things induced/pent up demand. Increased road capacity means people could plan more car trips without worrying about sitting in traffic.

malermeister 5y ago
Increased road capacity means more people plan car trips and end up setting in traffic :-) Traffic is people, if you increase road capacity, you'll just have more people taking the road until it's full enough for everyone to be stuck again.
oneoff786 5y ago
The creation of a new good isn’t really an example of this effect. This is discussing systems that are basically stable, then new supply causes a higher quantity demanded. iPhones aren’t really supply limited. The traffic example is salient.
a4isms 5y ago
> Increased road capacity means people could plan more car trips without worrying about sitting in traffic. You've got it in one. People think that the biggest highway with the most lanes will mean less sitting in traffic, so they plan their trips to include it. People think that a satellite city connected to the big city with a big highway will have a short car commute, so they choose to live there. This kind of thinking induces demand until the experience of sitting in traffic for an hour on one of the widest highways in the world—like Ontario's 401—discourages people from taking the highway. So politicians spend billions widening the highway some more. Lather, rinse, repeat.
- jjoonathan 5y ago
  Right, but this usually turns into the argument that we shouldn't add new capacity because then it would be used, and that's such a staggeringly stupid argument that I cannot comprehend the confusion of ideas that would lead someone to embrace it. What's worse, I hear this awful argument deployed under the flag of a cause I believe in: more public transport, less roads. Guess what? If we deploy more public transport, I bet people will use it more, too! Does that mean we shouldn't? Ugh. It's so dumb it almost feels like it has to be a false flag, but I've heard it from people who I know believe what they say, so I think it's just a meme at this point. A pejorative that people throw at cars without thinking about what they are saying. "Cars are bad at scaling throughput" is the argument we need. Not this "induced demand" garbage.
  - a4isms 5y ago
    "but this usually turns into..." You're arguing with someone who isn't present. If and when someone makes that argument here, you can refute the argument they actually make, rather than the one in your own head. Until then, you're actually arguing with your own personal straw-man. Also, and this is an actual thing in the HN guidelines, when you do argue, calling ideas staggeringly stupid and so forth is strongly discouraged.
    - jjoonathan 5y ago
      You're just declining to engage because you know I'm right :) Fair enough.
      - deleted 5y ago
        [deleted]
      - a4isms 5y ago
        Again, you're making things up. I never said that, I didn't even say you were wrong. I actually said you were not even wrong, and I'll say it again here: When you decide for yourself what somebody else might say—but hasn't said, or decide for yourself why you think somebody didn't say something, you're arguing with yourself. "Not even wrong" has a very specific meaning here, it means arguing from speculative premises that cannot be falsified. Like, "But other people will argue X," or, "You declined to engage because Y." Both of these statement forms are not even wrong. https://en.wikipedia.org/wiki/Not_even_wrong https://en.wikipedia.org/wiki/Not_even_wrong
simonh 5y ago
> Was there pent up demand for iPhones that was sated by their creation? Yes, correct. That’s spot on. A lot of people were crying out for a powerful, capable, usable mobile computer to access email, the web and use applications on the go. The mobile networks had invested billions building network capacity to meet these needs. This is why there were huge queues for the very first iPhone before hardly anyone had even touched one. The mobile industry had been full of speculation about what devices we would use on these networks, how they might work and what they would look like. Before the iPhone was even announced I could tell you very clearly what I needed a mobile device to be able to do for me, but not how it would do it. Apple figured that bit out. Think about it this way. If latent demand didn’t exist, how could Apple have figured out what device to design? How could they select the features and capabilities and prioritise them? They had to target a market, even though that market didn’t exist yet. Without thinking about latent demand that sort of novel product development would be just random feature selection and then see what gets traction. For sure some companies do that, but not all. Some of them think it through and target a market they hypothesise exists.
- robertlagrant 4y ago
  Well, it didn't have applications when it came out. You're retrofitting history with your argument, instead of keeping your argument to history. The iPhone was terrible at everything when it came out except capacitive touch and coolness. That's fine, but let's not pretend otherwise. Terming "people wanting to buy something better/cool" as latent demand is silly. It's a new/cool thing. There's no need to pretend there's anything latent about it. Make new shiny; people buy new shiny. And that's just for Apple. Most products require massive amounts of marketing to explain to people why they should be bought. That wouldn't be needed in a world with latent demand, just waiting to be fulfilled.
throw0101a 5y ago
> Did creating the iPhone induce demand for iPhones that otherwise would not have been there? Was there pent up demand for iPhones that was sated by their creation? Invention is the mother of necessity. — Marshal McLuhan > In the same way, it seems strange to term things induced/pent up demand. Increased road capacity means people could plan more car trips without worrying about sitting in traffic. Until that new capacity is filled up and now you have even more people sitting in traffic. The only way to reduce traffic is to get people out of cars, otherwise you're just spending money to kick the can down the road. See "What People Get Wrong About Induced Demand" by the Oh The Urbanity! channel: * https://www.youtube.com/watch?v=8wlld3Z9wRc https://www.youtube.com/watch?v=8wlld3Z9wRc Also "Does Induced Demand Apply to Housing?": * https://www.youtube.com/watch?v=c7FB_xI-U6w https://www.youtube.com/watch?v=c7FB_xI-U6w
TheCoelacanth 5y ago
If you gave away iPhones for less than the cost of producing them, like we do with roads, then yes, that would induce demand for iPhones.
- robertlagrant 4y ago
  That isn't the scenario. Also it's not true; people don't buy things they don't want, even if they're below cost, unless they want to sell them for more. That's not wanting the product; just the profit.
Bancakes 5y ago
All the technology iPhones provided already existed. People just fell for the marketing

wffurr 5y ago

What's with the editorialized title? The linked Wikipedia article is just titled "Induced Demand". That should be the HN title as well; OP please fix the title to match the linked page. If you want to then post a common with your view or reason for posting, that sounds great too. Then we can discuss it.

throwaway22032 5y ago

nickff 5y ago
I agree with you, it's a way of pejoratively referring to elasticity of demand.
- deleted 5y ago
  [deleted]
- afiori 5y ago
  why is it pejorative? I think there is a change in focus, daily car trips are elastic in gas/toll prices and induced by lack of congestion.
  - nickff 5y ago
    Congestion is a non-pecuniary cost, so there's no reason to use a different term. Every time I hear someone use the words 'induced demand', it is meant to indicate that it should be reduced/prevented; I know someone who works in Vancouver's city planning department, and uses the term in this way.
riffic 5y ago
I love how anyone can leave their two cents on this site, even for subjects they have absolutely no credentials on (you're answering on a throwaway so that's another strike against your expertise). I would personally reserve that for the folks who actually study the problem space, but whatevs.
- nickff 5y ago
  Please post a substantive reply, instead of a shallow dismissal. If you have no substantive reply to the parent commenter, it would be best to refrain from commenting. As per the HN Guidelines: >"When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."" >"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."

donatj 5y ago

The end goal of adding lanes to a freeway shouldn't be to "reduce congestion" but increase total throughput. Seems like a pretty basic misunderstanding. Adding lanes also has the effect of more lane changes, which are a big part of what slows traffic down to begin with.

forgetfulness 5y ago
If we're going to put it in computery terms, latency matters. People want decreased latency for themselves, not just to be in the company of more people sitting in the same traffic jam.

motohagiography 5y ago

Trying to remember an adage on nanog back in the day about why ISPs should provision 2x average capacity, and how traffic in the 1990s expanded to fill the bandwidth available to it. If I remember, it was about only making extra circuits available for burst traffic, and not available otherwise. At the time I remember thinking this had obvious paralells to road traffic. It sounds closely related to Parkinson's Law about work expanding to fill time allotted to it (https://en.wikipedia.org/wiki/Parkinson%27s_law https://en.wikipedia.org/wiki/Parkinson%27s_law) which links back to the OP. For express traffic, I've often thought periodically tapering off passing lanes using painted lines and forcing drivers who passively drive in them back into the active flow of traffic would increase the average speed and consistency of flow for related reasons and the idea of "smooth is fast." Physical dynamic traffic shaping, essentially. Adding complexity or even randomness to interrupt the dynamics that induce the increased demand would be a design consideration. I'd wonder where network protocol design ends and car traffic engineering begins, or if they are essentially the same thing.

rel2thr 5y ago

Urbanists way overstate the importance of induced demand and make it seem like gospel truth that adding roads is pointless I went down the rabbit hole of induced demand studies a few years back, the evidence for the idea that adding lanes or roads does not reduce congestion is pretty weak. There just aren't that many roads being built, theres a ton of confounding factors ( population growth ) , and even some of these studies like the A&M one in this wikipedia are mixed.

lostdog 5y ago

I prefer to think of it as either unmet or unsurfaced demand. It's easier to think about the two places where "induced demand" shows up in arguments: traffic and housing. For traffic and housing there's tons of people who would drive more or live somewhere dense if more roads/housing were provided. The big difference is whether the demand is exhaustible. For roads it's not: you would have to pave all of LA into a freeway system to eliminate traffic. Housing might be different though. Densifying the region around the downtown could outpace the influx of people. The difference is whether trying to exhaust the demand leads to a pleasant collection of neighborhoods or a 60-lane freeway hellscape.

99_00 5y ago

These ideas were popular when real estate developers wanted to build and sell a lot of downtown/centrally located condos. As downtowns run out of land and demand declines (because of work from home and the decline of downtowns) a new business plan will be created and a new ideology will be developed to support it. I just want to know what it'll be so I can front run it. Anyone have any idea?

wrnr 5y ago

No one has mentioned Breass's Paradox yet: https://www.youtube.com/watch?v=cALezV_Fwi0 https://www.youtube.com/watch?v=cALezV_Fwi0 This also happens in simple physical systems, as shown in the video later on.

riffic 5y ago
never knew this was a thing to be honest, but this is fascinating and worth exploring further (and I'm not even a planner).