(Brian Tung) wrote in :

Tommi Laine wrote:
Here in Finland gasoline costs about $ 6,98 a gallon at the moment and
people still don't seem to care. They just keep on driving. I wonder how
much the gasoline really have to cost before it begins to have effect on
people's driving habits.

Demand for gas is very inelastic: large changes in P yield relatively
small changes in Q. The few people who switch to mass transit or
cycling are largely swamped by the people who don't want to give up
the convenience or the experience of driving.


The cost of mass transit also goes up when fuel prices increase. Outside of
peak times, trains and buses are often run with a low percentage of
occupancy. In this case their overall efficiency is actually worse than
private motor vehicles.

Klazmon.