lpm wrote: ↑Tue Aug 23, 2022 8:42 am
Sciolus wrote: ↑Tue Aug 23, 2022 7:57 am
I was specifically after data showing the change in demand in response to increases in price. But as I mentioned, that isn't going to be available yet. So I will rely on petrol/diesel sales to prove that people respond to price increases by moaning a lot, demanding tax cuts, and using just as much as they did before.
I suspect it's impossible to notice thanks to pandemic effects swamping everything. A 3% fuel saving from driving carefully could be lost to less WFH or more UK holidays or ageing of national car fleet.
Humans are too slow to adapt to change. My guess is people who like saving have been driving carefully/less/efficient cars for years, while life's non savers need longer to respond to price.
Which is why a sudden painful shock to household finances will at least shove much needed change into behaviour and we don't want to blunt that pain.
Vehicle fuel was relatively expensive in the period 2011-2015 (
Graph, actual price, not inflation adjusted). Traffic did fall, and roads were noticeably less congested. Moreover speeding reduced - more than traffic reduced - as it seemed that more people did drive more carefully to conserve fuel.
There is a lot of discretionary driving - trips that you don't need to take, or which you can shorten, and people will do that when they are feeling the pinch. Median household income is £31,400, so there's a lot of people who do have to be a little careful with their money and think about how they spend it, and will definitely be feeling the pinch after their energy bill went up by £2000 a year, or maybe even rather more if we are to believe Citibank's
forecast published yesterday.
No doubt many of the numerous people who you see driving Land Rovers and big Audis, etc, in the wealthy area I live in will just pay and carry on, because they can afford to, and driving a such a car is part of who they are. But ultimately it is a minority of people in this country who don't have to think so very carefully about whether their expenditure fits into their income. Even some Land Rover drivers might be living at the edge of their income to achieve that status consumption, and might have to change what they do when it pushes them over the edge of their income. For example, my well-paid former next door neighbour the gas trader (next door is a substantially larger house/grounds) discovered he was living to the edge of and sometimes beyond his monthly income after he had his 5th child during that higher fuel price period, and found he was at risk of running out of cash. So he down-poshed his main 7-seater car from Audi to Ford - he kept the Porsche - and that made a sufficiently large difference to his outgoings he fixed the problem.
People can take a little while to respond to price changes. They often need first to discover the need to economise, and then think about how they can do that most acceptably. It may need some random chance to push them into doing something they wouldn't have thought of, or had thought of but rejected without trying it. For example, when railway lines suffer an extended closure and people have to find another way of making their journey for a few weeks, quite a few of them find something they prefer and don't return to old habits when the line reopens. They are forced into doing something which they just hadn't considered before, or had considered but thought it would be worse until they tried it.
I did some work for a bus company in Glasgow about 20 years ago, and the manager told me that ticket sales respond almost immediately to an increase in fares. He said that he was aiming only to put the fare up in line with inflation, but inevitably they went up in steps from time to time, roughly yearly. Demand adjusted downward in steps to the immediate increase, but then would have recovered by the time of the next increase. So, for the kind of very cash-constrained people who are material proportion of those who use local urban buses, even relatively modest price increases on a regular outgoing can have an immediate effect on demand.