So, When is it REALLY Going to Hurt?
July 21st, 2006 | by Brian Carr |I came across another interesting article today (it’s amazing what you can find if you just put a little bit of effort into it) that argues that even if gas prices rise to $4 or $5 per gallon, Americans probably won’t change their driving habits much.
The article references a quote from a UCLA finance professor from March, 2000 (when gas was $1.50 per gallon) that states, “I believe that another $.25 to $.50 increase, people would cut back on consumption. It exceeds the psychological barrier.”
And now, we long for the days when gas was $2.50, let alone $1.50.
But certainly, people are offsetting the worries brought on by higher gas prices by buying more fuel efficient vehicles, right?
Wrong.
According to Automotive News, in the first half of 2006, three out of the top four selling vehicles in the United States were large trucks (1. Ford F-150, 2. Chevy Silverado, 4. Dodge Ram).
So, it looks like the author that is arguing that demand/consumption won’t drop significantly until gas hits $4 or $5 has a valid point.
I have my own theory though.
Could it be that the demand hasn’t decreased because it’s easy for people to adjust their driving so that they are able to stretch their car’s gas a little bit further? I would bet that most people have made slight changes in their habits (just look at the recent growth in the number of sites like this, as well as the increased number of people who frequent these sites), and are getting better gas mileage, which greatly offsets the meteoric rise in the price of fuel.
Don’t get me wrong, I’m not trying to lay claim to a revolution (although I do think Daily Fuel Economy Tip is one of the best resources for smart, gas saving drivers); I still think that for most people, the price of gas hasn’t risen enough to really affect them in the wallet.
I do, however, think that people are more conscious of their driving habits, and that will continue to be the case as long as gas stays at these record prices.
