The change in quantity demanded in response to $4 gas is not a question of "if" but "how much" (and "when"):
But figuring gasoline prices have jumped 25 percent just since Christmas, it seems logical to expect an even bigger dip in highway traffic. But Douglas Pearce, head of the economics department at N.C. State University, said gas isn’t like other consumer products.
“Gasoline has a demand curve that we would call ‘inelastic,’ which implies that if prices go up demand goes down, but not by very much,” he said.
Pearce said that’s likely because most people are locked into their lifestyle patterns, at least in the short term.
Changes that could significantly alter someone’s fuel consumption pattern, such as buying a more fuel-efficient car or living closer to work, aren’t short-term decisions.
Then there’s the inherent uncertainty of basing a decision on something as fluid as the price of gasoline.
“These are adjustments that take a lot of thinking, a lot of time, and you may not want to make those adjustments if you don’t know that the price is going to stay high or keep going up,” Pearce said.
That quote could've been mine! I called Gareth McGrath a bit too late I guess.