How will we cope with gas prices
We’re already beginning to see consumers change their behaviors in response to high gas prices. Mainly, says N.C. State University economist Mike Walden, our strategy will be to buy less.
“When the price of something goes up, that motivates us to become more frugal — that is, use less of that more expensive product or service. And, indeed, we can look at what happened to consumers in terms of how they reacted to higher gas prices the last time that we saw gas prices go above $3 a gallon.
“Now I have some survey data on that: What we found is about half the drivers reduced their gas prices by consolidating shopping trips, making sure that they don’t go out several times a week. Maybe they cut that back, so they’re getting many things on one trip.
“Thirty percent said that they cancelled or modified their vacations. That’s very important, given we’re coming up on the vacation period, which is an important industry in North Carolina.
“And then 25 percent of them said that they found alternatives to driving alone to work. So that may mean carpooling or taking public transit.
“My guess is that these kinds of behavioral reactions will again occur.”Category: Economic Perspective