Total driving on highways in the US was down 3.7% for the month of May compared with May 2007, with gas prices up 25%. The experts say that demand for gas in the short term is relatively inelastic because it is affected by long-term decisions such as what kind of car to buy and where to move, and so we won't see demand really fall off for a while yet.
PS: On a side note, I would like to take this news item as a case study of the suckiness of traditional newspaper writing in the age of the internet. First read this Reuters piece, then read this blog entry by CBS guy Kevin Drum. The first, you will notice, is terrible. Why it's terrible:
- Even though it's short, it's bloated with all these vapid quotes from the Secretary of Transportation.
- The first sentence tries to jam too much information in and ends up leaving out a critical piece of information: driving is down 3.7% compared to what? Compared to the previous month? Compared to the same month last year? I had to look elsewhere for the information.
- The author insists on expressing increases and decreases in the meaningless absolute terms of millions of total miles driven. Nobody has an intuitive grasp of these figures--so why not stick with percentages?
- There are no links to the source material.
- There are no charts or graphs.
2 comments:
This whole comment seems bizarre to me.
'The downside of less travel is less money going into the government's highway trust fund, which helps pay for road projects. Revenue for the fund is off $1.5 billion.
...
"By driving less, and using more fuel-efficient vehicles, Americans are showing us that the highways of tomorrow cannot be supported solely by the federal gas tax," Peters said.'
'
Uh... if people are driving less, doesn't that mean less money is needed for highways? This sounds like saying the downside to fewer cases of cancer is a decrease in allocated money to cancer research. Actually, it's exactly like that. There is a slight validity to it. I hear that very obscure diseases get disproportionately little funding, so the people who do suffer from it suffer even more than they would have otherwise. Similarly, there can be highway projects that are actual improvement projects, rather than just maintenance, that require the same investment regardless of how many people benefit from it. Still though, I bet this is the exception.
It's a good point, but I think we can interpret her as saying that having less tax money in the fund is bad for her agency's budget outlays, not bad per se. I'm guessing that the general decline in driving will have little savings impact for the Department of Transportation, since maintenance cost is probably more a function like "time*(useRate+erosionRate)" rather than just closely corresponding to usage.
Moreover, it seems that, contrary to what she implies, the federal gas tax does not on its own pay for very much of the total cost of highways. See http://matthewyglesias.theatlantic.com/archives/2008/07/who_pays_for_highways.php
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