We’ve frequently bounced around the question of what level of gas prices would start to meaningfully change Americans’ driving behavior. It seemed like we started to get an answer last summer, when pump prices were topping $4. The financial calculus of commuting from the far suburbs for a middle class salary seemed to be unraveling, but the spike was so abrupt and short-lived, and there was so much other craziness going on with the world of high finance in flames and the real estate market imploding and the stormclouds of an epic recession looming, it was hard to tell exactly what was driving the action.
A new survey from IBM called “The Commuter’s Challenge” confirms that the $4 - $5 range for gas really is the breaking point for a large number of Americans. Asked at what gas price they would seriously consider other options for commuting (besides motoring solo) a stunning 70 percent of people pegged their magic number at $5 or less. If it were a Family Feud question, $5 itself would be “number one answer,” in fact, representing 21 percent of respondents.
With our political system rather mired at the moment and incapable of proactive (or even appropriately reactive) policy-making, it seems more and more likely that meaningful progress toward a more efficient and sensible transportation system will come about only if/when petroleum prices head back into three-digit land. If oil bounces back to $150 or above, we’ll start getting smart as a matter of practical necessity and all this ideological tussling over cars and freedom and rail and socialism will fall to the wayside.
Somewhat related: An interesting notion that’s been gaining some currency lately is the four-day work week, as road-tested by the state of Utah. While it would require some fiddling with the way we do things, a “staggered” four-day week would be a cure to urban congestion in many cities and would instantly cut commuting costs by 20 percent. It would also give Americans a lot more free time.
The IBM study doesn’t mention 4-day weeks per se, but it does pose the question of what people would do if they spent less time driving to the office:
How would people spend their extra time if their commutes could be reduced?
• 52% would spend it with family/friends (+9% points from 2008)
• 37% would partake in recreation (+3% points from 2008)
• 37% would exercise (+6% points from 2008)
• 33% would sleep more (+2% points from 2008)
• 11% would work more (+2% points from 2008)
Sounds wonderfully healthy. Almost European, even (except for the exercising part). In reality, maybe that time would be spent playing first-person shooter games and eating Funyons instead of going on bike rides and having family dinners–but we can always hope.
September 8th, 2009 at 12:53 pm
Or maybe we’d use that free time to make comments on blogposts and watch videos of bears falling out of trees.
September 8th, 2009 at 1:19 pm
4-day weeks = 80% of pay, not a great option for people with families, or hopes of retirement.
Telecommuting is a more desirable outcome - IBM has about 40% of its global workforce working outside their office environment.
September 8th, 2009 at 1:21 pm
Joe,
No — 4 ten hour days vs 5 8 hr days. Total pay remains the same.
JR
September 8th, 2009 at 1:25 pm
The American middle class is seen as another limitless resource. Five dollar a gallon gas won’t change that. My employer is certainly not going to give a damn if if it costs me 40% more to get to work, as long as I’m there during business hours. The only way this situation is going to change is if laws are passed that make employers foot at least some of the bill for our commutes. Don’t hold your breath.
September 8th, 2009 at 1:39 pm
Excellent.
Now all we need is a floating gas tax that pegs gas at $5/gal and we’ll be all set!
September 8th, 2009 at 1:41 pm
This statement seems unsubstantiated:
” ’staggered’ four-day week would be an cure to urban congestion in many cities and would instantly cut commuting costs by 20 percent. It would also give Americans a lot more free time.”
Would a four-day work week really accomplish these objectives? I’m highly skeptical. First, a four-day week might just become another sprawl enabler. People on the fence about moving to the next subdivision farther out in the suburbs might convince themselves that doing so is okay if they have to drive only four days rather than five. The net result might be no decrease in total driving or congestion because people would be driving longer distances despite driving one less day a week.
The most questionable claim, though, is one of “a lot more free time.” Sure, every weekend would be a three-day one, but the other four days a week, people would be burdened with long 10-hour days. Such long work days would leave virtually no time for evening leisure or family activities and make child care arrangements unreasonably difficulty for many parents.
Ultimately, four-day weeks are another quick fix for employers that don’t want to make deeper and more beneficial changes in terms of placing their facilities near transit, providing employess with free or subsidized transit passes, charging employees for parking, and other changes that would more meaningfully alter behavior.
September 8th, 2009 at 1:53 pm
Rockfish,
I’m sure Congress is working on that as we speak…
September 8th, 2009 at 2:00 pm
David SB:
The statements you refer to as “unsubstantiated” are simple math - a 4 day week entails 8 commutes instead of 10. A “substantiated” 20% reduction. If the average commute is 45 minutes, for example, that is 1.5 hours you have back in your week as “free time.” That may not count as “a lot more” to some people, but it’s hardly unsubstantiated.
Also, in response, you propose the utterly spurious conjecture that “a four-day week might just become another sprawl enabler.” You back up this claim with a series of completely unsubstantiated “mights.” Please.
A lot of people already work 10 hour days, or commute 2 hours to work because they cannot afford housing closer to their jobs. (This claim is substantiated, by the way, by the fact that I do both) A sensible proposal like a 4 day week is a no-cost idea that might actually improve many lives, and help the planet.
September 8th, 2009 at 2:02 pm
I dont have a citation for it, but, as I recall, demand for gas in the US started to fall as the price at the pump topped $4/gal. It stands to reason that sustained $5 gas would make a large percentage of the populace start economizing.
September 8th, 2009 at 2:05 pm
Sorry, Rockfish, your disrespectful response has lost you a subscriber and a Twitter follower. Bloggers need to be able to handle comments in disagreement with their views. Most of the time, the blogger need not respond to comments, but when those responses are occasionally needed, most often for clarification, they should be as gracious as possible. You lost sight of that goal and have lost my loyalty to your site as a result.
September 8th, 2009 at 2:15 pm
Oops. I guess maybe Rockfish is not the admin or the blog author. My stupid error in identification, but I still find Rockfish’s tone disappointing and still think four-day weeks, especially mandatory ones, are a bad way to deal with sprawl, congestion, pollution, etc.
September 8th, 2009 at 2:15 pm
David,
You get offended too easily. As such, you should stay away from the internet.
-Danny
September 8th, 2009 at 2:18 pm
David SB:
First, I am in no way associated with this blog. I am a commenter just like you.
Second, I only pointed out that your comment was incorrect, that the assertions of the post were substantiated, and that you tried to prove your point by making unsubstantiated claims of your own. How is being factual “ungracious?”
September 8th, 2009 at 2:35 pm
Rockfish, you say your claim is substantiated because you do both. I’ll make the now-trite comment that the plural of ‘anecdote’ is not ‘data’. I don’t happen to know anybody with your hours or commute, for instance.
Parents with 8-hour days are already out of the house about 10 hours, I don’t think you’re going to get a lot of takers at 12+ hours away. Of course some people do that now, they’re called ‘unhappy’ and it’s not good for families or society.
September 8th, 2009 at 4:59 pm
Joe-
Point taken. The hundreds of people on the train with me don’t constitute data either, but it may not be as uncommon as it may seem.
The 4 day week could also be optional, not mandatory, so people who felt it benefited them could take advantage of it, save on commuting costs, and free up highway space for other. Options are always better than prescriptions.
September 8th, 2009 at 6:11 pm
I think people SAY $5-per-gallon gas would change their habits, but I don’t think it really would. I think they’d fork over the dough and just complain a hell of a lot more. My intuition tells me that the real tipping point — the point at which people forsake the suburban-sprawl lifestyle and flock back to compact, walkable/transit-feasible cities and towns — is $9 per gallon. But to get to that point we have to pass through the $6-to-$7-per gallon stage, during which gunfire breaks out at suburban filling stations.
September 8th, 2009 at 10:48 pm
I’d be tripping over myself running to the front of the line to sign up for a four-day workweek, yes even at 10-hour days.
But I also changed my driving habits at $2/gallon.
September 9th, 2009 at 7:33 am
$2.25 a gallon got me into a more fuel efficient vehicle. $4 a gallon turned me from a driver into a bike commuter for at least 2-3 days per week.
September 9th, 2009 at 8:55 am
This strikes me as an odd policy wish. The notion of limiting middle class mobility as a “good” seems weird to me. Two observations: you implicitly acknowledge that $5 gas would not impinge the mobility of the wealthy. So you will free up road space for the Corzines and Soros of teh world while leaving the rest of us on a trolley car. Second, even if you assume that it’s evil to commute by car, is it equally evil to travel to see family and friends by car? The NYC region has traffic jams on weekends that far exceed what it has on weekdays as people fan out across the region to socialize with family and friends. Why do you want to eliminate that?
September 9th, 2009 at 9:01 am
[...] Survey: At $5/Gallon, 70% of Americans Would Try to Kick Car Commute Habit (Infrastructurist) [...]
September 9th, 2009 at 9:02 am
A broader question to ask is why “rush hour” exists in the first place. Perhaps the answer is because it is efficient for most businesses to operate on the same schedule and because time wasted because of traffic and congestion is typically a cost absorbed by individuals, not firms. Simple cost/benefit. If I spend an extra hour per day stuck in traffic, that’s my time, not my employer’s. If my firm’s clients are working a 9-5 schedule. Then its hugely beneficial for me to be in the office during the same time.
There is really no reason to expect that equation to change any time soon.
September 9th, 2009 at 12:58 pm
Put me down with those who don’t believe that $5/gallon gas will really change anything. There is $5/gallon gas in Canada - and nothing changed. There is $8/gallon gas in the UK - and nothing changed.
I talked with someone in the UK. His car gets 40 MPG and he lives 10 miles away from work. So at $8/gallon his gas cost of going each way is $2. $4 round trip. Big deal. He’s considering moving to somewhere that’s 20 miles away. So his gas cost will double to a not-so-whopping $8 every day to get to and from work.
I predict that even $10/gallon gas in the USA will not be enough to kill US car culture. People will whine about the price and buy more fuel-efficient cars but little else will change.
September 9th, 2009 at 1:21 pm
Eric,
That’s a strawman, of course.
A few things to keep in mind: Americans who live in congested areas are not particular happy spending as much time in their cars as they now do. There are real economic benefits to reducing congestion. There are real health and environmental (and therefore economic) benefits in moving toward a more multi-modal society. Currently, car travel constitutes something like 98% of total surface transportation and accounts for a large share of total US carbon emissions. Is it really *that* nefarious to be thinking about ways of gently moderating that (90%? 85%?) in coming decades and acknowledging the benefits of such?
Finally, given the political realities in this country around the gas tax, we’re talking here about the price of oil as set by a multi-trillion dollar international market. Whether I think a $5 gas–and the attendant effects–are “good” or not is fairly irrelevant. We should be prepared for those price levels, and if they materialize and that means a lot of lower and middle income Americans will be forced to drive less, then let’s be thinking about how to deal with that.
JR
September 9th, 2009 at 1:46 pm
“Americans who live in congested areas are not particular happy spending as much time in their cars as they now do.”
This is not a statement in support of pricing people away from cars and into an option they think is second best. It’s a statement in support of building adequate road capacity. When I see 2 hour back-ups at the GW Bridge on a Sunday night as people are trying to get home from a day out with family and friends I’m not rubbing my hands together imagining the joys of $5 or $50 gas. Clearly, creating massive, predictable congestion has not changed travel patterns because there is no way that transit will be a viable option for traveling from Plainfield to Bridgewater with a family of four and their stuff for the day — it does not work. People will sit in two hours of traffic, even people who take the train to work. Stop trying to keep people miserable (or staying at home).
September 9th, 2009 at 3:07 pm
Eric F:
The situation you describe does not necessarily support building more road capacity.
Road capacity is a special good because the marginal cost to the consumer is zero or very close to zero, therefore there will ALWAYS be excess demand. Heavy congestion, instead of supporting the case for building more roads, supports charging more for the use of those roads. Some system of tolls would be the most direct way to do this, but the price of fuel can act as a proxy toll if actual road use fees can not be implemented.
Large public infrastructure goods like roads are somewhat complicated by having a “public good” component - they benefit all members of society with certain indirect benefits - and thus one can make a case that they sould be subsidized to some extent. However, public transit infrastructure also has these benefits, and there is a convincing case to be made that public transit has just as much or more public benefit, with fewer negative externalities — so the question is what proportion of our resources (public resources) should we invest in subsidizing roads for automobile traffic, vs. what proporation should we invest in public transportation.
Right now, I think you would have to agree, too many people are getting a free ride on the roads, and the massive traffic delays are one symptom.
September 9th, 2009 at 3:13 pm
[...] gas really is the breaking point for a large number of Americans to change their driving behavior. The Infrastructurist via >Business Insider’s Green Sheet [...]
September 9th, 2009 at 3:42 pm
The really awful part of this whole thing is the fact the runup in gas prices last year was NOT due to supply and demand, but to pure, good old fashioned GREED! That’s right- GREED - from the speculators who ran up the cost of oil on a nearly every day basis last spring and summer. That is what really makes me mad as a communter who travels 60 miles each way to work, 5 days a week.
My employer does allow us to work 4, 10-hour days during the summer if we wish, which I jump on immediately! And yes, it DOES save 20% in commuting costs and YES, it does give me more family time.
But back to the speculators who cost us an arm and a leg and then went running gleefully to the bank with OUR money, I think those people should be prosecuted! And in the future, speculators should have to take delivery of every drop of oil they are buying rather than letting this be a high stakes Monoply game with you and I, the fuel consumers of this country, being the dupes! Another examply of the rich getting richer and the rest of us getting the finger!
September 9th, 2009 at 5:21 pm
“The really awful part of this whole thing is the fact the runup in gas prices last year was NOT due to supply and demand, but to pure, good old fashioned GREED! That’s right- GREED - from the speculators who ran up the cost of oil on a nearly every day basis last spring and summer.”
And now prices are lower because . . . the speculators are less greedy?
“Road capacity is a special good because the marginal cost to the consumer is zero or very close to zero, therefore there will ALWAYS be excess demand.”
The GW bridge has an $8 toll, which was just raised. People line up for 10 miles to pay it. NYC has not added road capacity for 40 years. I agree that you can’t simply add lanes on a mechanical basis, but NYC has done NOTHING to increase capacity. I have no problem with a tolled system to fund additions and manage trips, but you can’t really look at a 3 x 3 alignment of I-95 from the Bronx to New Haven and think that you are seeing an argument for “we just can’t build our way to congestion relief”. Please.
September 9th, 2009 at 7:39 pm
Rockfish; I have signed up for this blog specifically because of your correct if pithy response to Danny (and to balance that loss for admin. Sorry, Danny & Joe, but Rockfish’s comments were right on.) I work 4 x 10’s, and know several folks who do. The benefit of the three day weekend definitely outweighs the longer days for me… And let’s not be so sensitive - the blogosphere is where people get to be honest (s/he was) - hopefully without being a jerk (s/he wasn’t).
September 9th, 2009 at 7:41 pm
Eric F.; NYC’s lack of investment in road infrastructure may just be a very wise decision to incentivise the use of much more efficient public transport. It will look even more wise as we get to $5/gallon gas.
September 10th, 2009 at 8:59 am
Eric,
No, the speculators are just as greedy as ever. But as soon as the Justice Department started investigating the runup in oil prices last year and the connection to the speculators, oil dropped like a rock! And there have been various papers issued and news reports since then confirming the high price of oil last summer had very little if anything to do with supply and demand, but with speculation.
I just hope some of the speculators choked on the high priced oil they may have been stuck with. I still maintain that anyone buying oil should have to take delivery of every drop - thus eliminating the huge up and down of prices. IF it were supply and demand determining the market price, yes, you would have ups and downs, but but not the wild ups and downs we’ve seen lately. This is because supply and demand is a much more gradual thing. It’s not like one day we have small demand and the next day we have overheated demand making for a wild flucuation. Even in developing countries you aren’t going to see this happen, and in established countries, our demand is actually quite steady, especially if you remove the wildly flucuating costs.
September 11th, 2009 at 1:57 pm
Eric:
regardless of whether the price is $0 or $8, the massive, frequent traffic delays are evidence that the price is too low. You could build another GW bridge, and another I-95, and they would both be jammed as well if you don’t raise the price. I’m curious why you think increasing road capacity is perferable to decreasing demand (via higher prices.)
Max:
Removing or limiting the futures market in oil would not be likely to produce lower prices. In fact, it would probably due the opposite. The role of speculators in the market is to provide liquidity, which helps the producers and users of a commodity, such as oil, hedge their future costs and revenues. One possible side effect is increased short-term volatility, but the long-term price would be higher as the difficulty in hedging would create a premium in the price of the commodity.
Prices reflect expectations about future supply and demand. This is just as true for commodities as it is for pure financial securities like stocks and bonds. While the current levels of supply and demand can be measured with a fair amount of accuracy, the expectations for the future can and do change quite drastically as new information becomes available. Thus it is also not clear that the absence of a futures market would significantly reduce price volatility.
If it makes you feel any better, there were quite a few speculators who lost money in oil last year.
September 26th, 2009 at 3:33 pm
Does it change between a steady increase to $5 or an immediate jump? I bet it does.
November 14th, 2009 at 3:03 pm
I hate it when people talk about “speculators”. The price of oil has little to do with speculation aside from LOWERING long term prices in much the way J:Lai related above. However if you think their is a conspiracy to raise your cost of living you are correct but it does not emanate from the private markets but rather from government and mega banks. Average oil prices (excluding major wars) have not budged much since 1913 when priced in gold oz or silver oz. Oil however fluctuates and rises wildly when priced in US dollars! This whole attack on middle class living standards is the work of our own government and entities walled off enough from competition by government edict (goldman sacs and other mega banks and food companies like Monsanto or ADM).
The real battle lines have always been government and mega corporations on one side and small/medium business + the average citizen on the other side. So just remember that when somebody complains about “speculators” its likely ignorance or a government official trying to shift the blame off themselves where the blame belongs. CPI inflation is nothing more then a viciously regressive tax on those in the lower and middle income brackets.
November 14th, 2009 at 3:16 pm
PS the oil priced in gold oz chart can be found on my blog http://www.calmrebel.blogspot.com
Data provided by James Turk in (The coming collapse of the Dollar) and Martin Armstrong in his internet download (Its Just Time) provide the basis of my other points.
*1913 was chosen as the start year for the gold to oil chart because that was the year the Federal Reserve Bank was established (funny name because its not Federal (owned by mega bank families, Not a reserve as its just a check book that cannot bounce, and not a Bank because this form of accounting fraud requires no storage of any valuable commodity that required labor to buy.
*A large percentage of the largest corporations would not be competitive if it were not for subtle or obvious forms of government subsidy. Hence these corporations cannot be considered private enterprise and are just government entities in disguise and always have been. Without overt and stealthy forms of bailouts/privileges/preferential treatment, its not unreasonable to expect that a very large fraction of the very largest corporations would not exist, therefore they can best be described as camouflaged govt entities which require extortion (uhh taxes) in order to function.