Skip to Content
Streetsblog New York City home
Streetsblog New York City home
Log In
Charles Komanoff

KOMANOFF: High Gas Prices <i>Are</i> Reducing Driving!

10:46 AM EDT on July 20, 2022

The real problem.

Charles Komanoff. Photo: David Clark
Charles Komanoff. Photo: David Clark
Charles Komanoff. Photo: David Clark

Pricing has power. Changes in the prices of goods and services affect demand for those items. For some products by a lot, in other cases not so much. And most impacts from price changes take time to unfold fully. But price-elasticities are never zero.

(Price-elasticity: The percentage change in consumption of something, relative to the percentage change in its price.)

That’s my take — and a touchstone of my work for carbon taxing and congestion pricing. Nevertheless, stories appear from time to time, claiming that sky-high gasoline prices aren’t affecting gasoline consumption. Streetsblog ran two such posts in just the past week: Why Americans Don’t Drive Less When Gas Prices Soar, last Tuesday; and, a few days later, New Yorkers Are Still Driving Like Crazy. (The latter was given more context in Monday’s headlines post.)

To be sure, those stories addressed the supposed stickiness in the amount of driving, which isn’t quite identical to stickiness in consumption of gasoline. Still, the messaging was clear: driving is so baked in to Americans’ psyches and living conditions that costlier gas can never make much of a dent.

Except that it is — at least in New York State. Following the lead of Streetsblog’s Still Driving Like Crazy post, I took a look at monthly statewide “motor fuel” tax receipts — levies on gasoline and diesel fuel burned in cars and trucks (boats also consume a small fraction) — from this May back to the start of 2019, the last pre-pandemic year. Since the per-gallon tax rate was unchanged over this period, changes in fuel use should be perfectly reflected in changes in tax collections.

First, the chart:

Graphic: Charles Komanoff
Graphic: Charles Komanoff
Graphic: Charles Komanoff

From January through May 2019, the state took in $214 million in motor fuel taxes. Over the same five months this year, the take was $179 million — a $35-million, or 16-percent, drop.

To be honest, I’m not entirely sold on the precise figures. For one thing, this year’s February tax receipts figure of $48 million is crazy high — the biggest monthly take in five years. Though the anomaly is in the wrong direction (it pushes the 2022 total up rather than down), it doesn’t inspire confidence. Even more stark is the 40-percent drop comparing April 2022 vs. April 2019. 

Moreover, the bottom-line result of a one-sixth fall in sales of gasoline and diesel this year compared to last is a lot higher than I would expect, based on my sense of gasoline’s short-term price elasticity. It’s also true that changes in the last several years in the economy and the very structure of society could muddy the impact of price changes. The increased penetration of electric vehicles might have knocked a percent or two off of gasoline sales.

Clearly, more analysis is needed, including from the other 49 states. Extrapolating from my figures for New York should be done cautiously, as the beginning, not the end, of a conversation on demand responsiveness to expensive gasoline. Still, in my view, the data here put the onus on price-elasticity skeptics to make a convincing case, if they can, that gasoline use in the U.S. is impervious to changes in its price.

[Editor's note: Our coverage of driving in the pages of Streetsblog focuses on the simple fact that Americans do far too much of it, the result of bad planning that promotes car dependency.]

Advertisement: Used Dutch Bikes is your one-stop-shop for authentic Dutch bicycles. Choose from classic “grandma bikes” to modern seven-speeds that can haul three kids without breaking a sweat. We carry authentic brands like Gazelle, Batavus, BSP, Burgers, Cortina, and more — available in the USA for the first time!

Stay in touch

Sign up for our free newsletter

More from Streetsblog New York City

Congestion Pricing Opponents Are Blocking Disabled Access to Mass Transit, Politicians Charge

Just as the MTA begins speeding up new elevator construction, congestion pricing opponents are poised to stop it.

February 23, 2024

Legislation Introduced in Georgia to Fight Temporary License Plate Fraud

The bill is the most significant effort yet to stop the flow of fraudulent paper tags from Georgia car dealerships to New York City streets.

February 23, 2024

Community Board Backs DOT Road Diet for Brooklyn’s Deadly Third Av.

“This is just a beginning of what we could do to fix our community,” said one board member. “This is not done, this is not where we finish off.”

February 23, 2024

Friday’s Headlines: More Lunch Consumption Edition

Streetfilms goes to Paris. Plus more news.

February 23, 2024

Advocates Slam Albany Pols for Using Transit Fund to Encourage Driving

Gov. Hochul and state legislators in Albany are spending a congestion pricing-adjacent fund on toll rebates for drivers and showing zero interest in bus or rail, transit advocates charged.

February 23, 2024
See all posts