Memorial Day is the traditional opening of the summer driving season and Saturday’s O takes a look at whether high gas prices are changing behavior.
Apparently not. Demand for gasoline is has not significantly changed. The hypothesis is that consumers adapt to gradual changes in price, even signfiicant ones, by readjusting their spending in other categories. This is contrasted with behavior changes in the 70’s when price changes were sharper and supplies were limited.
One rational note: GM is discontinuing the Hummer H1, apparently for lack of demand.