Is road expansion in busy cities a good solution?

If you lowered the entry ticket cost of an India-Pakistan match at the Wankhade stadium, what would you expect? Obviously, lots of queues at the ticket counters!

Now suppose there is a congested road, and you expand it. There will be an initial decrease in congestion, but then quite soon you will find that the density of traffic becomes comparable to the time before the road was expanded. This can happen due to a variety of factors. The most significant being latent demand. Everybody finds it easier to undertake more trips so there are more vehicles on the road; some people will switch from a previously used road to the present one because of the promise of speed; some will find it worthwhile to invest in cars given the apparent presence of road space, and the like.

This induced traffic as it is called is supposedly the single most important result in road planning. This is referred to as the Pigou-Knight-Downs paradox, or the Downs-Thomson paradox, or even the Braess paradox, and its basic premise is that "expanding a road system as a remedy to congestion is not only ineffective, but often counterproductive."

For more on the topic, read The Economics of Trafic Congestion