$3 Gas: People Respond to Incentives

Lynne Kiesling

US gasoline at $3 drives people onto buses, trains

In the first quarter, as gas prices started to surge again, public transportation ridership rose 4.25 percent nationwide, representing almost 2.5 billion trips, the APTA said.

The increase “seems to relate very largely to gas prices,” Millar said. “Hearing anecdotally from our members about their second quarter numbers, it would appear that trend is continuing.”

I’ll spare you the intro micro lecture on substitution and income effects of price changes. But note that notwithstanding the inelastic nature of the demand for gasoline, the demand curve does appear to be downward sloping, and people are doing some substitution from driving into other means of transportation.

But you know me: get on your bike! Get some fresh air! Get a workout on your way to work! Save gas money!

UPDATE: Great minds think alike; Tim Haab made essentially the same point with reference to the same article.

UPDATE 2: Commenter-instigated bleg: anyone have a quick link to public transportation ridership data?

3 thoughts on “$3 Gas: People Respond to Incentives

  1. The article referred to has data on gas prices but anecdotes on mass transit ridership (unless I missed the data). Can you or anyone else supply data on ridership? How about data on number of car trips? (E.g., is there a matching decline?)

    In short, I don’t trust the ridership claim.

  2. I noticed the same thing! I’m headed home from work, so don’t have time to look up ridership data. I’ll make a bleg.

  3. Another response to high gasoline prices has shown up on the Northwest side of Milwaukee. Thieves are punching holes in gas tanks in order to drain them.

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