How the World Works

Kicking the gas-guzzling habit

Gasoline demand in the U.S. dropped for the tenth week in a row, the Wall Street Journal reports, the longest such stretch since the government started releasing weekly data in 1991.

Not coincidentally, the price of gasoline hit an all-time record high two weeks ago.

So does this mean Americans are finally reducing consumption in response to price hikes? Which, in turn, could provide support for a gasoline tax that might encourage conservation? (With provisions, of course, to protect low-income drivers from the regressive implications of such a tax.)

Not exactly. Because, as the Journal's Ana Campoy points out, the economy is also in the toilet, and disentangling which factor is making a bigger difference in driver behavior is a challenge.

Together, the two are acting as a vicious circle. Higher fuel prices raise inflation, further pinching consumers and making them think twice before getting in the car. Public transit agencies report higher numbers of riders. Consumers are combining necessary trips to use less gas and avoiding all unnecessary outings. Others are taking more extreme measures, dumping gas-guzzlers in favor of smaller, more fuel-efficient cars, or even moving closer to work.

Posted in: Economy

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Call it Web 2.0: The African version. The online microfinance lending site stumbles, but doesn't get knocked down
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