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Monday, January 29, 2007

The Price of Gas and Fuel Consumption

Paul Krugman saw the "Five Myths?" about gas consumption and conservation and sends along this graph. It's from his favorite textbook. He says:


Saw your "five myths" post. The thing is that the big issue isn't how much you drive, but mileage. And there's a strong effect of prices on consumption, mainly through that channel.

Oh, you do have to be careful, though: Europe uses a lot more diesel, so you don't want to just look at gasoline.

Here's the figure for use in the 2nd edition of the Krugman/Wells text showing that higher fuel prices are associated with lower fuel consumption:


    Posted by on Monday, January 29, 2007 at 03:53 PM in Economics, Environment, Oil | Permalink  TrackBack (0)  Comments (83)


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