What does the term 'induced demand' refer to in the context of infrastructure projects?

• A. The phenomenon where road capacity increases and traffic declines.
• B. The phenomenon where increasing road capacity leads to more traffic, potentially negating benefits.
• C. A policy requiring detours to be used when roads are congested.
• D. A method of financing road construction.

Answer: (B)

Induced demand means that expanding road capacity tends to attract more driving, not just relieve congestion. When a highway gets wider or more lanes are added, driving becomes cheaper and faster, which encourages more people to drive or to take trips they wouldn’t have made before. That surge in traffic can fill the new capacity, and sometimes even push total traffic higher than before, which can negate the initial relief from congestion. That’s why the best description is that increasing road capacity leads to more traffic, potentially erasing the benefits.

Other options don’t fit because they describe opposite or unrelated ideas: a scenario where traffic declines after expanding capacity, a policy about detours, or a financing method—none of which capture the idea that adding capacity can stimulate more driving and offset the gains.