Monday, July 28, 2008

Through $4 Gas, Consumers Find Religion: Record Decline in Driving, Record Level of Conservation

The Federal Highway Administration reported that travel during May 2008 on all roads and streets in the nation fell by -3.7% compared to the same month last year. May marks the seventh consectutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through May in 2008 fell by -2.4% compared to 2007.

There was never more than a single monthly decline in traffic volume until 2006, a few examples of two consectutive monthly declines 2006 and early 2007, but never in the history of these data was there ever a period of more than a 2-month consecutive decline until now, and therefore the 7 consecutive monthly decline in miles driven is a record, and represents the most significant adjustment to driving behavior in recent history.

On a moving 12-month total basis, traffic volume in May fell to a three-and-half year low of 2.966 trillion miles, the lowest level since January of 2005 (see chart above), and this measure has fallen in each of the last seven months. Further, the 16 billion mile decrease in May's moving 12-month total was the largest monthly decrease on record, going back to 1983, and marks
the most significant moving 12-month decrease in miles driven in at least the last 25 years.

High gas prices are working - consumers are changing their behavior by driving less and conserving gasoline. In fact, high gas prices have probably done more to change behavior and inspire conservation of fossil fuels than all of the Earth Days, and all of the efforts of groups like the Sierra Club, combined? Consumers have "found the religion of environmentalism and conservation" through high gas prices.


Amen, brothers and sisters.

12 Comments:

At 7/29/2008 12:03 AM, Blogger David Damore said...

This comment has been removed by the author.

 
At 7/29/2008 12:04 AM, Blogger David Damore said...

Nice post Mark.

People respond to incentives and what might be called disincentives [AKA: High gas prices]

Missing letter in title. → Drivng

 
At 7/29/2008 12:06 AM, Blogger Mark J. Perry said...

Thanks, David, it's fixed now.

 
At 7/29/2008 6:37 AM, Blogger OBloodyHell said...

be afraid of the message this is going to send to the environmentalists and mass-transit promoters.

be vewy, vewy afwaid.

You may never again see gas below $4 gallon, regardless of market forces.

 
At 7/29/2008 7:55 AM, Anonymous Anonymous said...

You may never again see gas below $4 gallon, regardless of market forces.

Isn't that the point...the price stays high, people continue to use less gas?

 
At 7/29/2008 8:31 AM, Anonymous Anonymous said...

Consumers have "found the religion of environmentalism and conservation" through high gas prices.

You mean, of course, OECD consumers, and in particular, US consumers. Germany, France, UK and Italy consumers found religion decades ago. Better late than never to the party.

Thus far, non-OECD consumers have not found religion. For instance, China gasoline consumption up 16.2% year over year.

 
At 7/29/2008 10:29 AM, Blogger Michael Kruse said...

"Thus far, non-OECD consumers have not found religion. For instance, China gasoline consumption up 16.2% year over year."

China and India also subsidize gas prices, although I here both countries are making reforms.

 
At 7/29/2008 11:27 AM, Anonymous Anonymous said...

China and India also subsidize gas prices

Maybe.

The biggest gas guzzlers on planet earth inhabit the North American continent. That would be the US and Canada and they have engaged in the gorging for a generation.

So what is the gasoline subsidy in China, you ask? You may be surprised.

Bottom line: China subsidizes gasoline. The US subsidizes ethanol. Both go into the tank. Call it a wash.

The instantaneous info available on the intertubz puts the NYT and WaPo to shame.

 
At 7/29/2008 1:00 PM, Anonymous bob wright said...

Interestingly, of the 5 regions reported on by the FHA, the west had the smallest reduction, 2.3% vs. 3.7% for the country as a whole.

The North Central region, including Michigan, reduced their driving by 4.5%.

So the left coast folks, who enjoy preaching to the rest of the country about conservation, reduced their driving less than the rest of the country.

Further, California reduced it's driving by only 1.7% in May. This placed CA tied for 4th from the bottom in the country.

North Dakota +0.7%
Louisiana -0.6
Hawaii -1.6
California -1.7
District of Columbia -1.7

Michigan reduced its driving by -7.4%. This was the largest reduction in the country.

 
At 7/29/2008 3:49 PM, Blogger juandos said...

Someone previously on another posting made the sage comment that was something to the effect: "high prices being the best way to stop high prices"...

Seems like it working now...

From Bloomberg News: Asian Nixonomics May Spell Subsidy-Driven Stagflation

There's some ugly forecasts in that article...

 
At 7/30/2008 9:52 PM, Blogger OBloodyHell said...

> Isn't that the point...the price stays high, people continue to use less gas?

Only if it's a response to actual market forces.

I'm speaking of idiots with agendas who will now try and use that fact to push those agendas onto people by using taxes, etc., to increase prices to maintain that price point regardless of the availability of resources, forcing their collectivist agendas onto people.

I've got no problems with rules the universe imposes on me -- It was here first, and it's a lot bigger than I am. I just try to stay out of its way and not get inadvertently trampled.

I don't appreciate idiots with agendas, however. They are still idiots.

 
At 7/30/2008 9:54 PM, Blogger OBloodyHell said...

> they have engaged in the gorging for a generation.

No, we have used the freedom and the capabilities granted to produce more wealth than any other nation in human history.

That includes more wealth per person by far, as well, in case you missed that part.

Sorry to burst your socialist bubble.

 

Post a Comment

<< Home