Polls / October 29, 2009

I drive less because petrol prices have risen

The latest eZonomics online poll shows people are divided over the effects of higher petrol prices on driving. Almost the same proportion of respondents drive less if petrol prices rise (44%) as the proportion who do not drive less (42%). Meanwhile, 14% of those who responded didn’t drive at all.

Baby, I will drive my car
For many people, petrol is a necessity and they cannot cut back quickly on the amount they buy. The 42% of respondents to the new poll who do not drive less when petrol prices rise could be in that situation.
It is sometimes argued that when higher oil prices push up a driver's petrol spend, the shopper is likely to cut back in other areas to balance their budget - having spin-on effects for other parts of the economy.

Higher oil prices put the brakes on driving
For others, petrol is like most other products - if its price increases, people cut back. The 44% of poll respondents who would cut back driving if it costs more are likely to take this view. Despite petrol being an "essential item", people can change their behaviour in response to rising prices. This idea is backed by academic research and recent data.

People respond quickly to changes in oil prices
Researchers in Germany last year found that a 10% increase in petrol prices decreased the amount of fuel purchased by German drivers by 3.5%. They noted the drop in fuel was higher than estimates from  the United States.
Data from the US Department of Transportation on the actual number of miles travelled on highways shows that after years of rises, US drivers reduced the number of miles they travelled between November 2007 and May 2009 by 4%. The drop coincided with a hike in the price of oil from about $50 a barrel in early 2007 to more than $130 in the middle of 2008.
The price of oil has since dropped.
These academic studies and the data suggest that people respond to rising oil prices by driving less - like 44% of the respondents to this poll.

You can react to higher oil prices
There's no question that higher petrol prices can cause problems for some. But there are steps people can take to offset this. Simply driving less will help - if you can.


eZonomics team
.(JavaScript must be enabled to view this email address)