Saturday, February 27, 2016
Cheaper Gas means more Driving
In an NPR article on gas prices, the article notes that because the price of gasoline has become cheaper more people driving their vehicles to work, school, etc. The price drop from a high of $4/gallon to a national average of $1.71/gallon.The article attributes this price drop in gasoline to the economic growth in the past few years in the U.S. Not only are people driving more because gas prices are lower but also because more people are employed and are using motor vehicles to commune to work. The article also makes notes some negative consequences in light of the recent gasoline price drops, one being increased pollution due to more vehicles on the road with most traveling longer distances to get to work. The other being a lose in productivity because with more people driving it takes longer to get to work due to traffic jams, construction, or similar road travel inconveniences. The article ends by commenting that with increased traffic on roads there's a need for greater investment the nation's infrastructure due to the federal highway fund shrinking because the tax on gasoline does not keep pace with inflation and also brings in even less on account of cars becoming more fuel efficient. Policy-makers are suggesting that we should move away from a gas tax and toward a tax the taxes the amount of miles we drive instead.
http://www.npr.org/2016/02/23/467768203/cheap-gas-contributes-to-record-u-s-traffic-volumes
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It was interesting to see in this article how many more people are using their cars in 2015. I think part of the reason is that there was a big push on using public transportation previously with the high gas prices that made it a much cheaper option than driving a car, but this doesn't necessarily seem to be the case anymore. Also, while I think that a gas tax based on the amount of miles that we drive may be a more appropriate method, I think it would be very hard to keep track of and enforce. I think maybe just having a fixed tax amount on each gallon of gas would be the best way to go about this.
ReplyDeleteThe idea of a fixed tax on each gallon of gas is really intriguing. If compared to the idea of a tax per mile, that would certainly raise debate from the truck and Hummer people of the world. In regard to the article, i never considered the decrease in productivity from that which ultimately leads to the decrease in output.
ReplyDeleteI can totally see why people would drive more now that the prices are lower. However, this article does not give a holistic view of the opportunity costs of driving - traffic inconveniences, pollution and time. While it does mention these in passing, there is no detailed study of reactions from people.
ReplyDeleteFor example, what major cities are being effected? In cities like New York which have a great public transportation network, is this a growing problem?
How are figures for public transport looking then?
Also, like Christopher said, I am curious as to how a tax per mile will be implemented?
This article leaves some questions unanswered.
Yeah I wonder how that would impact driving from less populated areas to more densely populated areas of the country. If people are spending more time in their cars than another alternative then why are they doing it? Would people be better off and more efficient if they used an alternative transportation like bike, bus, train etc. I am sure it depends on the type city an individual lives in. Would be curious to know more about all this. Thanks for the article.
ReplyDeleteChris, you make a very good point. I am actually quite surprised that driving has increased so much over the span of 2015. In the past, there has been a big push for public transportation but its seems as if that push for improvement has slightly hit the back burner due to the oil drop. I would definitely agree on the fact that our country as a whole really needs to improve public transportation. With being said, the concept is very simple, low oil prices cause people to be much less hesitant to drive cars. People do need to realize that gas prices will always fluctuate and not get too comfortable with cheap oil around.
ReplyDeleteIt's interesting to see how much is affected when gas prices go down. I have experienced only positive effects such as the fact that I'm more comfortable with increased driving because it has only costed me about $20 to fill up my gas tank recently. I don't think that a tax on the number of miles that someone drives is reasonable because mileage would then have to be closely monitored.
ReplyDeleteIn the article, Sriraj mentioned the population growth might also cause the “Annual Miles Driven” to rise. And I think it is possibly a sign of improvement in living standard – households can now buy more cars with their income.
ReplyDeleteOn another hand, this article mentioned, “When the economy tanked, driving dropped off significantly”. Lots of people are unemployed during recessions, hence less demand for driving to work, as result, less Annual Miles.
Also the decrease in transportation costs might actually encourage unemployed workers enlarger their 'hunting zone" and finally get into the labor force.
This is a very interesting article. I have seen both sides of the oil pieces declining because since the prices are low that makes gas prices go down also which is good for people that drive a lot. but I also live where a lot of the people that live in my town are oil rig workers and they don't like the low prices because they have been laid off so no matter how low gas prices get they don't drive much cause they don't know when the next time they are going to work.
ReplyDelete