> Roads are the most commons example of induced demand. Adding new roads rarely decreases travel times because new roads encourage more people to drive which leads to more traffic that soaks up any benefit the new roads added.
The problem with "induced demand" is that it's misnamed. It's really suppressed demand.
Suppose you have a congested road. It has two lanes and currently has enough traffic to require three lanes. So you add a third lane. Then you turn around and it's congested again.
Because the congestion suppresses demand. The third lane relieved some of the congestion which increased use. To satisfy the demand that exists when there isn't any congestion, you would need four lanes.
But not necessarily five, because once the congestion is gone, adding more lanes doesn't make it any more gone. If you built a twenty lane road there, traffic to fill it wouldn't just magically appear. (China has done the experiment.)
This is important because it applies to anything else you want to use to relieve the congestion. "Don't build more roads, that's induced demand. The only solution is more mass transit." But if you build the mass transit and it removes one lane worth of traffic from the road, that's the same result as adding the third lane. Which isn't enough for the same reason -- the reduction in congestion increases use of the road. Because the demand isn't being induced by a wider road, it's being suppressed by the existing congestion.
The internet speeds are a great example. In the dial up days, the low speed heavily suppressed demand. Your connection was pretty much maxed out whenever you were using it. Now connections are 1000 times faster or more and we use what, 20 times more bandwidth? Maybe 100 times? The speed increases outpaced the usage increases. It's possible to do that.