Gas prices -vs- driving time

The slide in gasoline prices won’t put more Americans behind the wheel.

It estimates that it now takes a 25% to 50% plunge in gas prices to increase car travel just 1%, compared with a 12% drop in the mid-1990s. (Prices have fallen 28% from the 2014 peak.) And it estimates that gas prices next year will average 23% less than this year’s average, and increased fuel economy will balance out an increase in miles traveled and other factors, leaving consumption in December virtually unchanged from a year earlier.

The reasons for this drop in what economists call price elasticity aren’t particularly new. The EIA lists five possible explanations:

People are driving less, period. This is measured by the vehicle miles traveled per capita. Growth slowed in the late 1990s — and has declined in recent years. Before the peak, hit in 2007, U.S. travel behavior closely tracked economic growth; that is less so now.

More retirees as baby boomers stop working. Retirees tend to drive less than those who work.

The trend toward living in urban areas. Those people tend to drive less than those in the suburbs and rural areas.

Teens aren’t as excited about driving either. They are delaying getting their drivers’ license — or skipping it.

A smaller percentage of the typical household budget is being spent on gas, which could make drivers less sensitive to the ups and downs in price.