Friday, May 2, 2008

I am wrong again on the effects of gas prices

The NYT "As Gas Costs Soar, Buyers Flock to Small Cars" shows once again I was wrong to assume that the increase in the price of gas has not changed behavior. How much has it changed our behavior? The graphic accompanying the article shows some pretty large percentages: 54% for the Honda Fit, 46% for the Toyota Yaris and 32% for the Ford Focus. It would be more helpful if they showed total number of car registrations as well. The hefty increases could well be because these cars started with a small base.

Anecdotally, I also saw 2 Smart cars on the road today. So, should we expect the price of small cars to rise in the near future because of increased demand?

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