Demand Curves Slope Downward: The Largest Monthly Decline in History for Miles Driven
IHT -- For years, it was not clear whether rising prices would ever prompt Americans to use less gasoline. But a combination of record high prices, the slowing economy and a tight credit market is having an effect.Gasoline demand has fallen sharply since the beginning of the year and is headed for the first annual drop in 17 years, according to U.S. government estimates.
The Transportation Department reported Friday that in March, Americans drove 11 billion fewer miles than in March 2007, a decline of 4.3% (see chart above). It is the first time since 1979 that traffic has dropped from one March to the next, and the month-on-month percentage decline is the largest since record keeping began in 1942.
Note: March was also the fifth consecutive monthly decline in miles driven, compared to the same month a year ago.
6 Comments:
My faith in consumers making somewhat rational choices is restored.
People wondered, would $2 gas cause drivers to finally pause and consider their habits?
Answer: Not even close.
$3 gas?
Still no.
$4 gas?
Finally, yes.
Too bad we're not the primary drivers of global demand any more. I doubt this'll translate to lower prices.
Anonymous - if you look at the chart, you will see the errors in your statements. The growth in miles driven was slowing in recent years before the actual decline set in. Also, businesses and consumers around the world are cutting back - this is a bubble about to burst.
From Ace of Spades:
Charles Schumer says that if Bush can "merely" convince his "Saudi friends" we'd reap great rewards -- an extra million barrels per day would save Americans $0.62 per gallon in gas.
But: ANWR would provide one million barrels per day at a generally agreed-upon basement minimum.
Charles Schumer claims that ANWR would at most save Americans one penny per gallon in gas.
Is Saudi oil magical?
Or is it just caribou that are magical?
> if you look at the chart, you will see the errors in your statements. The growth in miles driven was slowing in recent years before the actual decline set in.
Nice point. If you look close, the graph substantially levels off quite a bit as of 2005 to 2006. What were gas prices in 2005?
Also: why the hell hasn't anyone called attention to that levelling before this point? We've had at least two years to note it.
And in closing, to Anonymous's "$2 gas, $3 gas..." it's only just now actually reached a true high in the last six months, in constant dollars. One dollar gas meant a lot more when you were making a third as much or even less.
According to the Fed, miles driven peaked in 2006. This is was also the first year, according to charts on gasbuddy.com, that gas prices stayed above $2 the WHOLE year. I believe that consumers started adjusting their driving habits then, evidenced by the chart Dr. Perry provides.
Other factors come into play as well. This was THE of the peak in housing prices and its comensurate decline. Consumers sensed their pocket books were going to get tighter.
Sprawl is another factor. It is over! People don't want to drive over an hour to go to work. Plus, with the fact that anyone who wants a car has one, how many more miles could we possibly drive now?
Finally, teen age drivers drive less. More restrictions (curfew, # of passengers allowed in car, etc.)on their licenses keep them from driving more. Plus, Saturday night cruising is history.
"People wondered, would $2 gas cause drivers to finally pause and consider their habits?"...
Well $2.00/gal put a big halt on my superfluous driving...
Thanks to we have the following: "Charles Schumer claims that ANWR would at most save Americans one penny per gallon in gas"...
Gee! One wonders when an ambulance chaser all of sudden became so well versed (supposedly) in what ANWR has to offer...
Funny but even this 10 year old report debunks the ambulance chaser: Arctic National Wildlife Refuge, 1002 Area, Petroleum Assessment, 1998, Including Economic Analysis
"What were gas prices in 2005?"
In 2005 according to the Energy Information Agency the price of gasoline ranged from $1.88 to $2.23 per gallon...
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