Gas prices go up and people don't react much--in the short-run. But over longer periods of time, prolonged high gas prices will lead to adjustments in gas consumption. How long does it take? Well, we're just now starting to see the evidence that people are adjusting to the record prices set 3 months ago. What type of adjustments you ask? Adjustments like this (from CNN.com):
Irritated by the highest gas prices in U.S. history, John Thorner has a message for his 70 employees: Stay home.
Thorner is requiring all staff at the National Recreation and Park Association to avoid commuting at least one day a week -- either by working four long days and taking the fifth one off, or by working from home on the fifth day.
"The 70 people in our office drive an average of 30 miles a day. We did the math and figured that by having the employees not commute one day a week, we would be saving 100 gallons a week," says Thorner, executive director of the nonprofit, which is based in the suburbs of Washington.
"This is not a huge amount of gasoline, but it could serve as a model for other operations."
I'm not sure how long large-scale adjustments take, but I'm sure it is longer than 3 months. My guess is that we are just starting to see the beginnings of adjustments and over the next six months or so, as long as gas hovers around $3/gallon, we'll see more and more stories like this one.
