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Notes -
Empirically, yes. You still have to pay to live somewhere, so induced demand is limited by price. We rarely charge for driving on roads. If we did that, the long-run elasticity wouldn't be so close to 1, but also we wouldn't have to build new roads in the first place, or at least not as many: We could use congestion pricing to limit traffic.
The ability to add more housing capacity is also much larger. Over time, you can slowly convert single-family areas to include townhomes or duplexes, then lowrises, then midrises, and all the way up to highrises if the demand is there. That's easily a 20-fold increase in density, if not more. But building up is much more difficult with roads--it's not really reasonable, if your 3 lane highway is congested, to build 30 more lanes, whether they're on the side or above.
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