Re:Many Americans who live paycheck to paycheck blame debt
by AnthonyMouse on Saturday July 20, 2019 @04:29PM
(#20488159)
"Induced demand" leads to wrong conclusions in general, analogous to confusing the local maxima produced by a hill climbing algorithm with a global one.
It's possible to build enough of anything to satisfy all the demand, even roads. The real problem with roads is the opportunity cost. There are alternative, better ways of satisfying that demand -- like building more housing, so people can live closer to where they work and don't have to drive as far.
So what's the alternative, better way of satisfying demand for housing? Nobody has one? Then we ought to build more housing, even if we have to plow through some induced demand (which may or may not even be present) in order to satisfy the full demand.
The concept of induced demand in real estate is quite different than in transportation. The theoretical mechanism involves increased amenities induced by higher density above and beyond normal supply and demand interactions. It is likely to be a much smaller effect if it even exists at all. There is no solid research showing it is a significant in practice.
Here’s a recent presentation on the issue:
https://appam.confex.com/appam/2018/webprogram/Paper25811.ht...