When it comes to gas prices, I’m torn. Speaking as a consumer
, they’re rather high these days. On another level, they’re not high enough.
In the interests of full disclosure, it should be said that I drive a lot. How much is a lot? I’ve had my current car for just about 22 months, and in that time it’s accrued about 59,000 miles. Maybe as many as a thousand of those were without me in the car, due to complicated arrangements to minimze the cost of a car rental and other such considerations, but still. Mnay many long-distance road trips.
Are the current gas prices going to make me discontinue my road trippin’ habits? No, not likely. They’re not nearly high enough yet for me to start considering the alternatives (airplanes, buses, trains, or just staying put), because all of the alternatives are still more expensive. (Well, staying put is cheap, but too much of that is bad for me.) I believe this is an example of what economists would call an inelastic commodity: the demand decreases very little in proportion to the increase of the price.
Various government officials at various times have come forth with rhetoric of conservation. We’re running out of cheap oil (which is true), and so people should start using less of it. Well, guess what? That’s not going to work. Just telling people to conserve isn’t in and of itself a viable solution, since even if you accept the model of people as rational agents, they’re not so rational that they’re going to seriously take the dim and misty future into close consideration. If the state is serious about wanting people to conserve fuels, then they need to offer either incentives (like tax breaks for people who buy — or companies that develop — more efficient technologies) or disincentives (like big honking levies on gasoline). To balance out the latter, one might offer tax rebates for those persons and businesses (like truckers) that absolutely require gas to be in business.
Of course, implementing such a program changes the externalities as well: fewer vehicles on the road means better driving for the people left, by and large. That’s just an instinct, of course, and I have no data to back it up, but I’m curious if anyone’s done a study indexing the number/frequency of car collisions with gas prices. High gas prices might make good public policy in more ways than one.