Andrew Curry writes:
You have to pinch yourself as you leaf through the current issue of Newsweek, which is on the impact of high oil prices as pump prices climb and analysts are entertaining the thought of the $200 barrel of oil. Even a year ago, the coverage would certainly have been doom laden, even apocalyptic. But the cover story is almost upbeat, as it decides that this spring marked the moment when America changed:
With average gas prices per gallon edging toward $4, America’s notoriously profligate ways started to change fast. Americans are driving less, using mass transit more, buying fewer gas guzzlers, indeed shopping less wantonly in general, and lowering their previously unshakable confidence as consumers. Suddenly, Americans are acting differently; if not exactly like Swedes, then not quite like themselves, either. It’s a shift that could change the world.
What’s interesting is that it isn’t just journalistic hyperbole. The latest data from America’s Department of Transportation shows that high gas prices are changing consumer behaviour. Estimates for March show that Americans drove 3.4% fewer vehicle miles this year – 11 billion miles – than last year. It’s the biggest year-on-year monthly fall ever seen in the US transport data, and to give a sense of scale, the last time the year-on-year March data tipped downwards Jimmy Carter was President. In fact, there’s been a general downward trend since last November. So it turns out that driving habits do respond to price signals provided the price signals are sharp enough and persistent enough. And this has good effects; one result has been that nine million fewer tonnes of greenhouse gases were discharged into the atmosphere in the first quarter of 2008.
And this also bears out one of the central findings of the recent report, Dollars and Consumer Sense, from our colleagues at Yankelovich, which looks at consumer trade-offs in the face of recession. Certainly consumers plan to cut costs, for example from buying at stores which have cheaper prices but a smaller product range, and by trading down on quality. But quite a lot of the trade offs reported in the research involve lower consumption, even less consumerism – delaying purchases, cutting back on food and gasoline, cooking from scratch instead of buying prepared foods, buying second-hand, and giving up ‘shopping for fun’. Not exactly Sweden, at least not yet. But not exactly ‘shopping for America‘ either.
Thanks to Matt Cutts for the photo.