According to the numbers provided, the price of gas doesn't seem to lead to people buying less. In fact, if anything is true, it's the opposite. As prices are rising, people are buying more gas. Out of every month in the past four years, the month when people in Wisconsin bought more gas than any other was September of 2005. That's the month following Hurricane Katrina when prices spiked to well above three dollars a gallon.Again, I could probably use the title "I'll Never Lack For Work" on about 75% of my posts. Increases in demand lead to higher prices and higher consumption ..., oh, never mind. There's also this thing called substitution along different margins to consider.
Erin Roth, who represents big oil companies in Wisconsin, says they thought three dollars a gallon would change people's habits but it didn't. "It doesn't appear that people are adjusting their driving habits. They may be adjusting other purchasing habits, but we're not seeing it in the transportation fuels," Roth said.Economic hysteresis, putty-clay, optimal inertia, break out the calculus of variations. Oh, and $3 a gallon today is the equivalent of $1.10 or so a gallon in 1982. And shifts happen.
It appears the time of year has more to do with demand for gas than price. For years, big oil companies have blamed increased summer driving for higher prices during the summer. So while demand may be driving up the price, it doesn't appear the price is driving down demand.Harder problem: is the effect of the seasonal shift different? Perhaps people are responding at the margins. The last couple of days I've found myself fuming about sluggish pickup trucks taking their time making left turns on cross streets, and at stop signs, a few sluggish pickup trucks, improperly spaced, add up to a long wait.
We'll know that conservation behavior is kicking in in a more substantial way when we see Priuses tailgating Escalades and Miatas blowing the doors off Hemi Rams and cutting in aggressively.
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