Great Moments in "Duh"

Here’s a headline from today’s New York Times:
As Pump Prices Soar, Buyers Flock to Small Cars

Repeat after me: “When man bites dog, that’s news. When dog bites man, that’s not news.”

There was one piece of interesting information in the article, however. Last April, four cylinder engines outsold six cylinder engines in the US. What is interesting is that the milestone was reached, not that the market share of smaller engines increased.

The market share effect is simply a rational response to changed market conditions. When gas prices go up and consume a larger share of income, people find ways to consume less gas. In the short run, they try and drive less. You eliminate unnecessary trips; combine multiple errands into one drive. These are behavioral changes.

Longer term, people make bigger structural changes, like buying smaller cars that get better mileage. For many families, the cars they drive are either the first or second largest concentration of capital they have, after their houses. As that capital is fully depreciated, and comes up for replacement, people are buying more efficient vehicles.

Despite all the complaining about high gas prices, however, I haven’t seen any increase in carpooling. This indicates to me that people are more willing to devote higher percentages of their income to gas, rather than make that big a behavioral change. At least so far.

So when we see a shift in the number of carpoolers, that will be news.