Tuesday, May 6, 2008

Now for some effects of the increase in gasoline prices

Jim Hamilton shows the effects of the gasoline price increases:
1. Number of miles traveled by vehicles on US roads are down.
2. US gasoline consumption is down 1% from the first 4 months of 2007.
3. Sales of domestic light trucks (includes SUV) is down 20% in April (compared to April 2007)

However, even though I was wrong that the gas price increases have had no effect on consumer behavior, I think it emphasizes the point that an increase of more than 10cents per year for 10 years on gasoline is required to change behavior as was originally proposed here. There is an income elasticity of demand for gasoline that needs to be factored in so that the effect of increases in income do not cancel out the effects of price increases.

Update: Gas Prices Send Surge of Riders to Mass Transit
Gas prices knock bicycle sales, repairs into higher gear
NPR: Paying at the Pump. Among the stories nested there:
1. Public Transit Ridership in Miami Grows
2. L.A. Drivers Ditch Cars for Subway
3. More Commuters Opting for Mass Transit in Boston
4. Big Gas Prices Lure Buyers to Small Cars

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