Wednesday, August 13, 2008


I am surprised given the lack of substitutes most people have. Though that fact suggests that high gas prices lead to a pretty big aggregate welfare loss.

WASHINGTON (Reuters) - Americans scaled back their driving during June by almost 5 percent in response to soaring fuel costs, the government said on Wednesday -- a day after announcing the biggest six-month drop in U.S. petroleum demand in 26 years.

The Transportation Department said U.S. motorists drove 12.2 billion fewer miles in June compared to a year earlier, marking the eight month in a row that travel declined in the face of record gas prices as Americans change their driving habits, buy more fuel-efficient cars and switch to public transport.