The gas price and income thing is tricky because while there are general patterns for energy use at various income levels (the famous "quintiles"), they aren't that straightforward.  People with higher income generally drive more miles, but factors like "do you have teenage children" often weigh more.

FWIW, I believe in tipping points, and while I only make fuzzy uncertain predictions ... I think it's possible that we'll see one.

It was after all a tipping point that produced the rapid change in energy use patterns at the end of the 70's and the early 80's.  It was not simply an extrapolation of what came before.

Infrastructure changes produce behavior changes -- nothing mysterious about it.

grist.org

I watched "Crude Awakening" last night, and it makes the point yet again that you better not expect too much from gas prices while they are still so laughably low.  Starbucks Coffee was cited as $50 per gallon.  Sugar water sodas fly out of the vending machines at the YMCA at more than $7.50 per gallon.

Matt Simmons put it this way:  For about 20 cents, you can a cup of gas in the tank of the average US car, five or six people in the seats, a whole bunch of stuff in the trunk, and then go about a mile and a half in a couple of minutes.  That's how cheap $3.20 gas is.

In years past, I used to be surprised at how many pennies got left on the ground; now I'm finding more nickels, dimes, and even quarters when I'm out walking.  People are simply not bothering to look very hard for change they drop--apparently it's not worth it.  Yesterday I found a quarter.   Somebody who probably complains about gas being high priced didn't think that taking the time to find a quarter in the middle of a sidewalk was worth it.  

The 5% Project

We have to wait and see of course.  It would be stupid to count these eggs as all chickens, or as no chickens.

But certainly, it is willfully blind to say a "first in 26 years" (the USA Today story) is nothing at all.

When what we really need are more energy effecient cars.
In particular, electric cars.
Even more specific, extended range electric vehicles.  EREVs :P

My friend is rehabing an older home in a city neighborhood -- an experiment in urban sustainability complete with a grape arbor, apple tree, vegie garden, and solar panels.  He can walk or bike just about anywhere.  But the city busses run mostly empty.  And people are embarrassed to walk or wait at the bus stop because its assumed they do so because of a failing on their part -- they lack the wherewithall to have even a clunker car.

Our cars are more than just transportation or even status symbol.  They represent some basic level of adult independence and ability to function within society.

We must adjust our mindset in addition to creating the infrastructure.  Prices alone won't change minds.

"We must be the change we wish to see in the world." -- Mahatma Ghandi

Our cars are more than just transportation or even status symbol.  They represent some basic level of adult independence and ability to function within society.

Brilliant.  Only someone in touch with real reality can inform the conversation like this.

It puts me in mind of another observation.  Was it here?  Not sure. It was to the effect that, riding the bus is the ultimate embarrassment to inner city dwellers.  It infers a total lacking in the rider, a dependence.  It is the exact opposite of sticking out your thumb for a ride.

A sign that you are not needed or wanted, but rather a burden to civilization.  To a mighty empire of power that runs on greed, gunpowder, blood, and oil.  The only way out?  Become cannon fodder and take your chances.  "Be all you can be?"

"We must be the change we wish to see in the world." -- Mahatma Ghandi

That statement bears repitition.  Over and over and over in a zen chant by our whole movement to save the living planet.

http://amazngdrx.blogharbor.com/blog

Anyway, coming back up the hill, in 1st gear, at 4:30 pm I was engulfed in the most noxious cloud of automobile pollution, dust, dirt, tar specks, rubbery particulates and other generally foul gases.

When I got to my apartment, I had the taste of rubber in my mouth, and while taking a hot bath to cleanse myself, I could even smell the road as I exhaled -- so deep inside my lungs had it pentrated!

I thought -- would I end up like runner Dr. James Fixx who espoused healthy exercise only to drop dead of a heart attack?

Talk about carbon offsets...there should be a way in society for me to "bill" all the drivers on that road and compensate me for the damage done to my lungs while trying to reduce CO2.

Paradoxically, if I were driving up the hill, I would also be breathing those fumes and contributing to them, but, I would be in them for a much shorter time than while I was pedaling in first gear up the 500 ft climb.

1.  Vehicles turn over after five years.  High gas prices will have a five year lag time on consumption.  The effects we see today are from gas going up during the 2005 hurricanes, not current pricing.
   
2. There is a similar theoretical 15-year lag in home placement.  It will take 15 to see an effect on where people live now to moving closer to the city.
   
3.  Gas price increase affects the poor first.
   

Compounding the problem is that the true costs to society of producing, distributing, and burning gasoline is not captured in the price.  Such economic externalities encourage over consumption by under representing the true cost of gasoline at the pump.  This amounts to a consumer subsidy paid for by letting oil companies, gasoline refiners, and motorists damage the environment without paying for the damage they are doing.

When economists collect information price and sales volume they are looking at the past.  This is sometimes the distant past, but sometimes it is the "past" up to just a moment ago.  The statement "elasticity is X" applies to that run of the past.

Unfortunately that same statement is often read as "elasticity in the future will be," which is a lot less certain.

Now in various markets and for various goods it may prove true that elasticity will follow historical patterns, but there are breaking points.  Or tipping points.

Something sometimes happens that makes it a "new game" in which old measures of past-elasticity don't completely apply.

I mean, in many of the comments above I don't see a keen memory of the 70's or what happened then.

In 1978 the US hit a peak gasoline consumption of 2.7 trillion barrels per year.  This after a steady climb (with only one "down" year in the previous 30 years).

And then something funny happened, gasoline consumption went into a 4 year decline, falling to 2.4 trillion barrels in 1982.

Gasoline consumption did not climb back to its 1978 levels until 1992!  And then of course, in a period of low prices and low environmental concern, consumption boomed.

Going back to "elasticity," the assumption is that "all things being equal" we'll continue on our same path, extending our recent behavior and price sensitivity into the future.

... but I'm not sure this is a situation where things are equal ... or at least not equal to the 90's.  Indeed, things might start to resemble the 70's in more way than one.

Odograph, I am having a little trouble following your argument, but I get the idea you are mixing up the quantity demanded with the price elasticity of demand.  Let me just point out that the coeffecient of short term price elasticity (-0.2) was much closer to what was measured during the post-oil shock 1970s (-0.21 to -0.34) than what we have seen in the first few years of the new millennium (-0.034 to -0.077).  Translated for the non-nerdy economists among us, that means there is damn little price sensitivity today, and even when gas prices were going up like crazy and Jimmy Carter was declaring the moral equivalent of war on wasteful energy use and taxes were being piled onto gas prices, the amount by which people cut their use of gasoline on the basis of price was quite modest, as explained in a fairly recent paper regarding Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand

So the credit card is high this month  $4000 rather than the usual $3600 or so...oh yeah, we went to that bed a breakfast.  Or it must be the new TV and eating out a bit more.  

Only in the longterm will people notice that its a bit harder to pay the bills.  Most Americans don't understand their finances and have no idea how to place a value on the hours they work and how to best spend the fruits of their labors to get the best value and most enjoyment/security from their earnings.

Gas will need to hit at least $5 per gallon before folks really change their ways.

Cheers, Gary Gifford

In today's post you agree that "short term price elasticity (-0.2) was much closer to what was measured during the post-oil shock 1970s (-0.21 to -0.34) than what we have seen in the first few years of the new millennium (-0.034 to -0.077)."

Now I'm sure you don't believe that the elasticity we have seen "in the first few years of the new millennium" is not fixed, and unchanging.

When I talk about tipping points, I am thinking about social and economic changes that would affect quantity demanded, and make for change.  To a gnome in a room with only a "elasticity calculator" it would appear as an elasticity change.  And sure it might include the sort of social, political, and economic changes we saw with Carter & etc. in the 70s.