Driving goes up

Old habits die hard, especially when the price of gasoline falls by $1.50 a gallon. The NYT reports what many of us have been suspecting: More drivers are on the road. In the last two weeks U.S. gasoline consumption was down only 6.4 percent in each week compared with the same weeks of 2007. That compares with declines of 9.5 percent and 9.7 percent, respectively, for the previous two weeks (numbers from MasterCard Advisors). Now it should be said that consumption is still down from last year. Also, there might be regional differences in driving patterns (the MTA reported big increases in ridership last month). But if gas continues to fall - and experts say the average price in L.A. could soon be below three bucks a gallon - it's a good bet more of us will be back on the freeways.

“Driving habits die hard, and they can reincarnate quickly,” said Christopher R. Knittel, an economist at the University of California, Davis, who studies gasoline demand. In the late 1980s, he added: “As soon as gas prices fell, there was no real incentive to drive less anymore. If oil prices continue to fall and the economy recovers, I would expect consumers to return to wanting larger and less fuel-efficient cars.” With auto companies closing factories that produce sport utility vehicles in favor of smaller, gas-efficient cars, it may be hard to veer back to the gas-guzzling days very quickly. But Dan Lopez, business manager at the Ford dealership in the Louisiana town of Sulphur, near here, says he has already noticed a shift. Truck sales froze over the summer, he said, but now “some people are gradually getting back into the truck market. We’re used to the comforts, frills and whistles, and so if gasoline goes down to a reasonable level, people will not stay in a little boxy fuel-efficient car.”

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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