Marginal Revolution: Americans Driving Less

July
S	M	T	W	Th	F	St
			1	2	3	4
5	6	7	8	9	10	11
12	13	14	15	16	17	18
19	20	21	22	23	24	25
26	27	28	29	30	31

« Tuna fish query | Main | Markets in everything »

Americans Driving Less

11 billion fewer miles were driven this March compared to last March.

Posted by Alex Tabarrok on May 25, 2008 at 12:03 AM in Economics | Permalink

Comments

The 'brilliant' Obama gets a taste of the law of demand. ;-)

Obama says fuel prices will change car habits | Politics | Reuters
"CHICAGO (Reuters) - Barack Obama said on Saturday Americans would start changing the kinds of cars they drive if gasoline prices continue to climb"
http://www.reuters.com/article/politicsNews/idUSN2430015120080525?feedType=RSS&feedName=politicsNews&rpc=22&sp=true

Posted by: Speedmaster at May 25, 2008 9:43:58 AM

This needs context. It is estimated that there were around 250 million vehicles in the US now. Assuming that 80% of them are in active use, the average car driver drove about 55 miles less in March 2008 than he / she did same time last year. Which boils down to driving about 3 miles lesser per day. Could be lots of reasons for that - not the least of which is not that people are driving proportionally lesser, but that fewer people are driving in the first place. More people may have switched to public transport. Besides, if people are unemployed, (unemployment seems to be on an upward trend anyway), then they don't really have anywhere to go.

Posted by: Nandu at May 25, 2008 12:25:44 PM

People are driving less because gas prices are higher, of course. The April and May numbers should show a steeper reduction, since prices are considerably higher.

At the link is this quote:

' “That Americans are driving less underscores the challenges facing the Highway Trust Fund and its reliance on the federal gasoline excise tax,” said Acting Federal Highway Administrator Jim Ray. '

It is not clear what the "challenges" are. If people drive less, govt. receives less excise tax income, but there is less wear on roads to be repaired.

Posted by: Gregory Rehmke at May 25, 2008 12:37:48 PM

I see the gas company ads now - drive your car, its patriotic. Sadly I think they would have more effect than the turn off your lights for an hour campaigns.

Posted by: Moschops at May 25, 2008 1:27:06 PM

these statistics shown just as 'absolute numbers' don't reveal much. I looked at the original article, and they mention a 4.7 percent decline relative to March/2007.

A good accomplishment, but still small when compared with the percentage change in prices - gasoline itself is quite inelastic since there are no close substitutes - but we can think of other transport methods as substitutes, to use less gasoline - as a mean to "save it". But the burden of these "savings" might still be too high for most people, if we think in the opportunity cost of NOT using a car: it gives flexibility to choose where to go, comfort, saves time, etc. So these "savings" would be just irrelevant in terms of its share in the budget constraint to justify a consumption change.

A small portion of the market might have been really affected, others might have decreased consumption in an attempt to "give the example", but these cases don't look that much significative in the aggregate.

Posted by: Alexandre at May 25, 2008 7:40:45 PM

Much as that might make sense, I would hesitate before attributing this stat entirely to gas mileage. At least here in southern Michigan, we got twice the normal amount of snow in March, almost all of it in the form of big snowfalls that cause many people to stay home the next day. That could easily account for a 5% drop-off in driving locally.

Posted by: Sol at May 26, 2008 6:53:46 AM

A good accomplishment, but still small when compared with the percentage change in prices - gasoline itself is quite inelastic since there are no close substitute

Yes, absolutely short-term. All the SUVs bought during cheap gas aren't going to magically disappear. At the same time, higher gas mileage cars sold now will be on the road for a long time.

The effects are, unsurprisingly, even steeper when you look at new car sales. SUVs are way, way down.

Posted by: John Thacker at May 26, 2008 2:24:39 PM

Why do we attribute "law of demand" for this decline in absolute gasoline usage? Or suggest the decline is a a "good accomplishment"? The estimate is for total miles during the calendar month of March, 2008, right?

For much of the nation, March, 2008, had only 19 working days, as millions of workers were off on the 10 week-end days and on Good Friday. By contrast, March, 2007, had 22 working days for most folks. It is surprising to me "that estimated vehicle miles traveled (VMT) on all U.S. public roads for March 2008 fell 4.3 percent". I would have expected a larger decline.

Posted by: John Dewey at May 27, 2008 5:59:12 AM

Also very important to note, fuel consumption is essentially the same. Fuel efficiency is declining. I believe this is happening even though fuel economy is improving for cars.

I have a couple ideas on why this is happening, and am interested in hearing others.

Fuel efficient driving is too complicated for most people to understand, so price pressure actually promotes bad driving habits.

Giffen Behavior in Driving: Perhaps there is Giffen Behavior in driving. If the cost of driving goes up, we may get more demand for driving. People are pressured to forgoe luxery driving during off-peak hours, but must drive more during peak hours to produce a needed increase in income.

Supporting the first, I did a back of an envelop calculation of when it may be worthwhile for a person to slow down. Basically, a person's time need to be worth less than about $5 for them to slow down from around 70mph.

Posted by: aaron at May 27, 2008 7:31:01 AM

http://www.mindfully.org/Energy/2003/Anything-Into-Oil1may03.htm

Anything Into Oil
Technological savvy could turn 600 million tons of turkey guts and other waste
into 4 billion barrels of light Texas crude each year
BRAD LEMLEY / Discover v.24, n.5, 1may03

Posted by: at Jun 1, 2008 1:53:18 PM

http://www.mindfully.org/Energy/2003/Anything-Into-Oil1may03.htm

Anything Into Oil
Technological savvy could turn 600 million tons of turkey guts and other waste
into 4 billion barrels of light Texas crude each year
BRAD LEMLEY / Discover v.24, n.5, 1may03

Posted by: at Jun 1, 2008 1:54:02 PM

Many people now use the Internet to do business, after receiving the business should be the best as far as possible, to allow customer satisfaction. But some Internet companies, not to start on your money to begin with, so on and then close the first half, resulting in Juankuan flee. Not only did not complete 租車the project, customers would also like to once again spend money and time to decoration. Dear Customer: This is no guarantee as the company not to find the.

Posted by: 抓漏 at Dec 3, 2008 10:39:16 PM

And the more cheap holic gold is very good for you.

Posted by: cheap holic gold at Jan 1, 2009 8:51:53 PM

Replica Gucci Jewelry
Gucci Replica Jewelry
Tiffany Jewelry
Replica Tiffany Jewelry
Tiffany Replica Jewelry/a>

Posted by: aion kina at Mar 17, 2009 11:23:09 PM

all the things should be careful

Posted by: macheal at May 13, 2009 4:53:53 AM

Is it realistic?

Posted by: aure at May 13, 2009 4:54:39 AM

just practice your driving skills

Posted by: aure at May 13, 2009 4:56:35 AM

aion gold
aion money
cheap aion gold
cheap aion money
buy aion gold