As gas goes up, driving goes down
Demand goes up; supply stays level; price goes up; demand goes down - finally. What $3.00/gallon couldn't do, $4.00/gallon has. Despite the bite it puts on my own finances, I've been wanting this for years.
Wednesday, May 28, 2008
Correct response to rising gas prices
Demand goes up; supply stays level; price goes up; demand goes down - finally. What $3.00/gallon couldn't do, $4.00/gallon has. Despite the bite it puts on my own finances, I've been wanting this for years.
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economics
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Yes, despite complaints for years about rising gas prices, it's been pretty price inelastic for Americans. But I guess we finally found the point at which our demand finally gets elastic.
Traditionally, liberals have complained that Americans can't change their habits because of the structure of our built environment, which supposedly discourages every activity except driving. While the development market certainly has responded to Americans' autophilia, I always thought individual consumers were more clever than they were given credit for. As it turns out, they just didn't have enough incentive to begin changing until now.
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