Thursday, September 29, 2005

The Grip of Gas - Why you'll pay through the nose to keep driving :: Slate

Nice article by Austan Goolsbee, economics professor at the University of Chicago Graduate School of Business. Extract:

Practically speaking, the only hope of changing America's driving habits is a hefty price increase that lasts. For, oh, five years. The data show that after that long, even the response of American drivers to higher prices can be pretty sizable. Five years gives people the time to come up with substitutes. Higher commuting costs over that many years could induce you to buy a smaller car, move closer to work, find a car pool for your kids. Of course, that's why Hurricane Katrina is not likely to have a lasting impact on gasoline use. It's a big blip, but only a transitory one. Which means it's exactly what consumers don't change their behavior for.

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