One of the big debates in transport circles is the concept of ‘induced demand’ or ‘induced traffic’. As its simplest, induced demand means that when you make an improvement to a transport corridor, that improvement will encourage more people to use that transport corridor – or more simply: “if you build it they will come”. Induced demand isn’t necessarily a good thing or a bad thing, although its treatment can have a big effect on the justification for transport projects.

A common critique made of roading project economic analyses is that they ignore, or under-estimate, the effect of induced traffic on the viability of that project. Most roading projects are primarily justified on the basis that they will reduce travel times, thereby giving people more time to do other stuff, and also enabling freight to be shifted around a city or country quicker than before. I’m sceptical of ‘time savings benefits’ (explained in World Bank report here) for a number of reasons, of which induced demand is certainly a big factor. The World Bank also talks about how induced traffic should be dealt with when analysing transport projects – with a critical conclusion being that induced traffic can actually halve time savings benefits. I wonder if NZTA takes that into account?

The idea of induced traffic is a bit counter-intuitive. At first thought it appears obvious that widening a road would make the traffic flow better – after all more lanes means more capacity which means more vehicles are able to pass through it in a given space of time. Hence there really should be lower congestion, right? Well the problem with that approach is that it ignores the longer term effects of induced demand. The wider road certainly does initially lead to less congestion, but that makes it a more attractive route for someone to travel along – particular at the times when the road used to be most congested. This leads to more people using the road, and rapidly erodes the time saving and congestion relieving benefits that the road widening, or road construction, was supposed to bring.

There are a number of different ways in which induced demand occurs, which when combined certainly make it appear very very difficult to ever solve congestion by expanding road capacity:

  1. Time-shift induced demand: This is when people may have previously taken their trip during an ‘off-peak’ or ‘shoulder-peak’ time, but shift to driving during peak hour because there is more capacity available and (at least initially) congestion during peak times has been reduced.
  2. Route-shift induced demand: This is when people may have previously taken a variety of different routes to get to their destination, but then shift to using the one that was previously congested. I do note that this type of induced demand is likely to benefit the roads that were previously being used, but it still contributes to more potentially unexpected traffic using the route in question.
  3. Mode-shift induced demand: This is when people who may have previously used public transport, or walked, or cycled the route switch to using their cars, because the reduced congestion has made that a more viable option.
  4. Changed destination induced demand: This is a longer term effect, where people will potentially alter where they live or where they work to take advantage of the improvements to the corridor. They may not have previously used this road, but its initial benefits will attract people to locate their homes or jobs somewhere near that road.
  5. Change of trip frequency induced demand: This is when people might make trips along a certain corridor more often because of the improvements to that corridor. For example, someone may not worry about undertaking their necessary tasks in separate trips along an improved corridor, whereas previously they might have bundled them together into one trip.

Obviously in some circumstances induced demand can increase the benefits of a project. An example of that is Auckland’s CBD Rail Tunnel Project, where I think there will be a significant reliance on induced demand to provide the project with its benefits. These benefits will come in the form of mode-shifting people away from private vehicle use (so therefore reducing congestion on the roads), encouraging redevelopment and investment in the CBD, improving peak-hour capacity of the transport network to the CBD and so forth.

However, in other circumstance – most obviously in situations where roading projects are being analysed – induced demand will actually lead to a reduction in the benefits of that project. Let’s say we look at the Waterview Connection as an example. It is largely justified on the basis that 90,000 vehicles a day will save 15 minutes of travel time. However, induced demand might change a few things, and potentially have a significant impact on that assumption. A few questions could be asked about the potential effects of induced demand on the calculated benefits of the Waterview Connection, for example:

  1. Were 90,000 vehicles a day previously trying to get across that route, or make the trips that the Waterview Connection will provide for? If not, then is it really accurate to say that all 90,000 vehicles will have such a benefit?
  2. What if 120,000 vehicles a day end up trying to use the route (thanks to the various ways in which the road may induce demand, as outlined above), making it highly congested? That might mean each vehicle only saves 7 minutes compared to the status quo, rather than 15 minutes. That would mean a reduced overall benefit of the project, and perhaps could put into doubt the accuracy of its original cost-benefit analysis.
  3. What are the other effects of inducing more traffic onto the roads? These include safety effects, CO2 emissions and increasing our use of fuels. Have these been measured?

Despite all these questions about the effects of induced traffic on the justification for a new piece of infrastructure, such as the Waterview Connection, I actually think that the most significant effect of induced traffic – in terms of reducing the benefits of investment in the road network – is when it comes to road widening.

At least for a project such as the Waterview Connection, there will be some lasting benefits. Local roads – like Mt Albert Road, Carrington Road, Richardson Road and so forth that currently carry traffic along the kinds of trips that the Waterview Connection will provide for – will have their traffic reduced. And this reduction is likely to be fairly permanent. I base this observation on seeing what has happened to Great South Road since the southern motorway was built and the effects on Great North Road when the northwest motorway was built. Although the population of Auckland has increased significantly since these two motorways were first built, and although the number of cars in Auckland has increased many times over, these two roads are less congested than they were many years ago (at least along the parts that parallel the motorway). So at least for new infrastructure, which offers more options, there is a long-term benefit in the reduced congestion on the “old road”.

This is not the case for road widening. In the case of road widening you are not offering people more options, but rather just encouraging more people to use the same route – and (surprise surprise) they always do. Growing up in Western Springs, I have seen a number of motorway widening projects on the Northwest Motorway, designed to “fix congestion” there once and for all. Originally it was removing the “three lanes down to two” problem at the St Lukes Road bridge, then a fourth lane into the CBD at Western Springs, then a fourth westbound lane between the CBD and Western Springs. In each case there was some initial relief, but over time the “gains” from the project simply encouraged more people to use the route – and after not very long we were back to square one yet again.

It is obvious that this same process has happened throughout Auckland. More often than not it is the widest motorways that experience the greatest congestion – which is understandable I suppose in the case of extremely high-use areas such as the Gillies Ave to Khyber Pass Road section of the Southern Motorway, but rather telling in terms of projects such as the proposed $860 million widening of the Northwest Motorway. As I have explained previously, the Northwest Motorway is the most “tidal” of all Auckland’s motorways, and generally only gets congested at peak times in the peak direction. This is different to a lot of State Highway 1 – which is busy in both directions during peak and off-peak times between Mt Wellington in the south and Takapuna (or even Albany) in the north.

If we look back at the many different ways in which traffic can be induced, it appears quite obvious that within a few years the widened Northwest Motorway will be just as busy as it is now, and we would have effectively wasted $860 million on nothing. Traffic that travels outside peak times will switch to travelling at peak times, some patronage on the Western Line railway will probably switch to driving, further development will be encouraged on the urban periphery (not exactly where we want to encourage it), and people will be encouraged to make longer trips. Surely there’s a better way to spend such a vast sum of money?

$860 million would easily cover an extension of the Onehunga Line to the Airport I suspect.

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  1. Have you seen awful (but not surprising) NZ Herald article about Stephen Joyce?
    Has the interesting comment from Joyce that he believes Waterview will become the city-airport route, and that seems to be a major justification for building it. That to me seems rather amazing, as a quick Google Maps search tells me that the current shortest route, down Manukau and Pah roads is only 20km from central Auckland, while route following the Waterview Connection would be about 28km. Hard to imagine people using the much longer route at anytime of day.
    Have you come across any documentation that sheds more light on this?

  2. I think it’s an obsession with “making all the lines on the map join up” actually. Or the feeling that people travelling from the airport to the CBD don’t want to leave the motorway at all.

    I suppose that keeping on the motorway means that it would be faster than going via Manukau Road. I think the traffic forecasts that expected 97% of traffic from the North Shore to the airport to use the Waterview Connection is also pretty dodgy.

  3. It was a letter to the editor from Christine Rose. They’re not published online sadly.

    John Roughan is an idiot on planning/transport matters. He thinks Auckland should sprawl everywhere and hates any form of urban planning. It’s no surprise he loves Steven Joyce.

  4. My office at work has moved from a floor with a free paper so I don’t get a chance to read the paper much anymore… I should be able to get text alerts for certain words or phrases on the opionion page…

  5. I largely agree with this post, but induced demand also applies to public transport. It encourages people to make trips they wouldn’t otherwise do (and if they are subsidised this isn’t a net positive as most of the benefits accrue to the passenger, rather than society which is what happens with car driver to PT modeshift), or can in some cases encourage shift from bike/walking to bus (typically free buses have this rather negative effect which needs to be more than offset by taking more cars off the road).

    The other problem is public transport induced demand encouraging peak usage when off peak usage would be more efficient, I’m thinking of strongly incentivising non-commuter use to shift to the off peak, through price. In fact induced demand at off peak periods for public transport is rarely a bad thing as long as the passenger is paying a fare, because the marginal costs of usage in off peaks are very small, and it helps add to the overall viability of the system by utilising capacity more evenly through the day.

  6. Liberty, yes I absolutely agree that you get induced demand on public transport. However, the massive key difference is that generally public transport works better the higher its demand is (as higher frequencies are viable) while the road system works worse as demand increases, due to congestion.

    I do agree to some extent about shifting demand where possible to off-peak. I reckon a 10% increase in peak time fares could perhaps offseta 25% reduction in off-peak fares. Also, I think it is important to keep frequencies good during off peak times, as currently many PT users ar encouraged to trval at peak hour because off peak services are really slow and infrequent.

  7. Jeez, that article on Joyce almost sounds like an infomercial.

    You’d almost have to wonder the way it is written (you can almost see the lovehearts in Roughan’s eyes) if Roughan is shooting to be Joyce’s civil union partner or something. Talk about the most uncritically thought out article ever.

    “He’d been advised there was no doubt travellers from the city would take the northwestern motorway as far as Waterview before turning towards the airport but they would not go as far as Rosebank. Figures, when you think about it.”

    Erm, no it doesn’t, as pointed out above. Seeing most tourists use GPS’s in their rentals these days, they’ll still get directed to take the Queenstown Rd exit and I notice the Airport buses are still using Mt Eden Rd instead of Dominion.

  8. That is because the traffic on Dominion Road is awful these days. I drove up it the other day in the middle of a Saturday and it was backed up right to Valley Road. Quite bizzare…

    Not sure if there had been an accident but I have a feeling the motorway is beginning to kick in. It’s almost like NZTA has a plan where they just get enough funding to build motorways that finish midway through cities. Then they rely on the fact that all the local streets will get clogged up with induced traffic to create the demand to finish the rest of the motorway and ensure they get the funding.

    Just because you’re paranoid doesn’t mean they’re not out to get you…

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