Oh sure, drivers began scaling back just days after the price spikes caused by Hurricane Katrina. But not by much, really. American household budgets have extraordinary elasticity for absorbing high gas prices. But there are now signs that drivers are reaching their limits.
In the past six weeks, gas consumption has dropped by 1.1%. That's the most sustained drop in 16 years, except for the period following Hurricane Katrina, according to the "Wall Street Journal." And if prices reach $4, as many economists predict, an estimated 65
percent of American car owners report they will dramatically change their driving behavior, according to a study commissioned by the Automotive Aftermarket Industry Association.
But what does that mean? Not mentioned in the "Journal" article is that a six-week sampling period is too small to divine long-term economic behavior, let alone driving patterns. The vast majority of gas is burned in commuting to work. Most Americans are locked into those commutes. To be sure, use of public transportation has been on the rise for the last two years. Even carpooling is up. But Americans have decades-proven habit of grumbling loudly at rising gas prices, and then resuming old behaviors.
Will $4 gasoline change this? News that gas could hit this threshold before Memorial Day caught President Bush by surprise. "Wait, what did you just say?" he asked of a reporter at a news conference last week. "You're predicting $4-a-gallon gasoline? That's interesting. I hadn't heard that. . . . I know it's high now." If it's true that high gas prices could dampen the summer driving season, the effects will be felt throughout the already ailing economy. Ironically, a weakened economy could bring gas prices down . . . a little. A slump could be all that's necessary to lull Americans into old driving habits.
Sources: Earth Times, Wall Street Journal, Los Angeles Times, USA Today
Photo: Creative Commons
