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Reason Foundation

High Gas Prices Prompt Less Driving Again

Robert Poole
August 12, 2008, 1:15pm

The WSJ reports "U.S. driving slid for the eighth straight month in June, making the decline more pronounced that the drop that occurred during the 1970s oil shock. The U.S. Department of Transportation said Americans drove 12.2 billion miles less in June than a year earlier. With that, the decline since November is now 53.2 billion miles, topping the 49.3 billion decline three decades ago." And the AP's Joan Lowy writes, "As summer vacation season kicked in, Americans got out of their cars, driving 12.2 billion fewer miles in June than the same month a year earlier. The 4.7 percent decline, which came while gas prices were peaking, was the biggest monthly driving drop in a downward trend that began in November, the Federal Highway Administration said Wednesday." That people drive a little less when the cost of doing so goes up considerably should come as no surprise. This is basic Adam Smith: the higher the price of a good, the less people will consume of it, and vice-versa. This is the same principle that makes congestion pricing work. If you charge more at rush-hour, some people will shift the time of their trip out of rush hour; others will decide to carpool or take the bus; still others may opt to telecommute at least part of the time. Interestingly, all the data we have so far suggests that only a few percent of all the reduced miles traveled have been shifted to transit. What most people are doing is combining several trips into one or not taking very marginal trips. The car is still, by far, the most versatile and flexible form of transportation for most people. Reason Foundation's Transportation and Congestion Pricing Research

Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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