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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Cogito who wrote (111969)	5/26/2009 5:26:46 PM
From: TimF	Respond to of 541416

The rise in gas prices last year was very rapid, but also short-lived. As was the change in vehicle demand based on it. The question is, if it had lasted longer would the shift in demand have increased or settled out? I think it might be the later more than the former. The rapid increase was a shock to people, but after awhile people get used to the higher prices. The change in the vehicles actually on the road would obviously be larger with the price remaining relatively high for longer, but the people who are most sensitive to it would already have changed and you would still have had plenty of SUVs and large or powerful high fuel consumption cars on the road, after the massive rush of a relatively small portion of such people with such vehicles to get out of them. When (not if) gas prices go up and stay up Nominal dollars? I agree its when not if. Real dollars? I think its likely, but unless your talking in the very long term I would say it is if. Percentage of average individual income or spending? Its clearly if. And that last point is perhaps most important in determining changes in consumer behavior. car companies will be very glad they have prepared by developing vehicles that get better mileage Car companies might not be so glad if the lower profitability of the smaller cars means they aren't around any more when fuel prices increase a lot. But maybe we continued bailouts will mean that survival isn't a concern. I hope not, but it is possible.