Update: Traffic Volume
Thanks to John Thacker for a pointer to a longer historical data source for traffic volume back to 1971. There were two previous periods of significant decreases in traffic volume, comparable to the most recent 9-month, 2.08% decrease in miles driven (moving 12-month total) from November 2007 to July 2008. There was a 11-month, 2.12% decrease in traffic volume from December 1973 to October 1974 (see shaded area in graph above), when gas increased from 40 cents to 55 cents per gallon. I think price controls were in effect then and prevented an even higher increase in gas prices, since oil went from $4.30 to $11.16 per barrel during that period.
A 3.25% reduction in traffic volume occurred over a 12-month period from May 1979 to May 1980 when oil almost tripled from $15 to $40 per barrel, and retail gas prices almost doubled from 62 cents to $1.11 (see shaded area in graph).
Therefore, I stand corrected - there were several previous periods in U.S. history with greater reductions in traffic volume than the recent 9-month period of a cumulative 2.08% decrease in miles driven. With gas prices falling now ($2.68 in Missouri) in October, the trend may reverse, although we'll probably see monthly declines in August and September when those data become available.
3 Comments:
I'm quite sure that price controls were in effect for one of those -- and that certainly justifies the reduction. You can't drive anywhere if you can't get any, and even if you have it, do you really want to drive somewhere and get stuck unable to get any?
So that is an almost forced reduction in driving.
Not so sure about the later 70s period.
Not so sure about the later 70s period.
My recollection is that price controls were loosened, and the price went up-- but some states used various forms of rationing like odd-even license plate systems.
Of course, whether you want price controls and shortages or higher prices, either way consumption had to decline.
The two previous cases are different because the oil shock was sudden, though we can note that it took a long time for the trend line to recover after the 1979 oil shock. In this case, prices started to go up more slowly, and we had stagnation in miles driven before the big change this year. There's lots of ways to compare the three oil shocks, though.
BTW, if you care, the August 2008 numbers are out.
August numbers not seen since 2001. Now up to a 2.17% decline over 10 months, beating the first gas crisis, of 1974. Gas prices are falling now, so it'll be interesting in two months to see how much of a rebound, if any, is present in the October numbers.
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