What price changes behavior?

The WSJ asks
How expensive would gas have to be for you to significantly
cut the amount you drive?

The answer:

 click for larger graph

Interesting that 31% of WSJ readers have already seen their behavior altered . . .

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  1. Danielle commented on Aug 17

    My hubby is a die-hard car lover and he just started taking the train… I’m in shock!

    In the last few years, cars on the road have increased by anywhere from 30 to 50% in our area and the traffic is atrocious. So it’s not a question of price but a question of sanity.

    I’d also like to mention that we’ve been getting hit by smog for the last couple of years. Something we NEVER used to get. Supposedly, 70% of this pollution is coming from Toronto which itself is getting it from the Great Lakes. And this is in a couple of years only. The car industry perhaps? We might not be able to prove global warming but it’s pretty obvious that we are negatively affecting our environment.

    I’m still convinced the Fed didn’t realize what it was doing when it reduced its rate from 7 to 1% so fast. OVERSTIMULATION that’s what it was.

  2. susan commented on Aug 17

    One thing that bothers me is not simply the lack of frugaliy, but the lack of a sense of social responsibility. The money isn’t a big issue with us but we cut usage by a third because if practiced by everyone it would reduce price. People failing to make some attempt are a bit hypocritical when they complain about the prices.

    And of course people who yell loudly for the war on terror and fail to reduce gas consumption are bigger hypocrites. Yet the ones buying hummers seem to be of this type.

  3. dude commented on Aug 17

    very interesting poll. there is clearly some percieved elasticity in the price of gas, but how much of it is real? I mean, our society is confirgured so that we *must* have cars to get to and from work. even if the price of gas doubles, my guess is that most people will still be driving quite a bit because the *have* to. until communities start deciding that they want alternatives, we are pretty much stuck with the daily commute. people like living in the suburbs and have a nice great big backyard and a 1/4 acre lot for their kids to play on. The densest city in the U.S. is San Francisco and it is still something like 3x less dense than Paris. We cannot change these kinds of infrastructure issues overnight, and until there are practical alternatives to driving your own car, things will not change. Would I rather spend double on gas, or spend 4 additional hours everyday taking the bus to daycare, then to work, back to daycare, and back home, then not being able to run errands at lunch? I think most people would rather just pay more. We are way too accustom to our conveniences.

  4. Lord commented on Aug 17

    If a third have already altered their driving with no effect on prices, then prices have only one direction to go. Up.

  5. joe commented on Aug 17


    Our society uses about twice as much energy per dollar of gnp as other industrial nations. The reality that one must drive under current structures does not change the fact that one can chose a variety of vehicles with greatly differing mileages and that in most of our lives there is at least some flexibility in the number of trips we take.

    Your argument is equivalent to saying that because are not saving there is no possibility of saving, this is of course true for a significant number of hard pressed workers, but there are also many, many cases where people buy things that previous generations would cut back on.

    The notion of helplessness in the face of such events is not promising.

  6. Danielle commented on Aug 17

    I read somewhere that many Americans are starting to trade in their SUVs for minivans because the deals out there are amazing. Reducing gas consumption is still not a priority because there are still easy ways to reduce monthly payments.

  7. None of Your Business commented on Aug 18

    Economics 101: What price changes behavior?

    I first saw this on The Big Picture blog which posted it based on the Wall Street Journal article: What price changes behavior? It’s basically a comment on how inelastic gas prices are with regards to demand.

  8. Matt commented on Aug 19

    People inclined to be frugal with their gas consumption already are, regardless of the price. Those disinclined to frugality won’t cut back until the price reaches the level of inflicting serious pain.

    My car gets 35MPG. Living within walking distance of my office would raise my monthly housing expense by something like $1500. I put about 150 miles per week on my car…mostly commuting (which I can’t cut without making _radical_ changes to my life) and driving across the border to a lower-tax state for refueling (yes, this makes perfect economic sense!).

    Just how guilty am I supposed to feel for saying there’s just about no imaginable price that would make me cut back?

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