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Friday, May 18, 2007

It's not boycotts that change gas prices, it's behavior

Americans are finally starting to grasp the meaning of higher gas prices, reducing driving and finding other ways to cut down fuel consumption.
Since 2005, Americans have driven 8 billion to 9 billion fewer miles per month than they would have if pre-2005 trends had continued, according to a USA TODAY analysis of federal data...One-third of those polled by USA TODAY this month say they have shortened or canceled a planned car vacation.
And yet, just a few days ago some folks were still attempting the inane gesture of a one-day gas boycott. Proposed for May 15, here's a view of how the proposed boycott worked:
Below are the closing prices for June gasoline on the NYMEX starting on May 14th:

May 14 $2.30
May 15 $2.30
May 16 $2.34
May 17 $2.42
I'd explain a bit more why this was completely ineffective, but blogger Robert Rapier (who also gathered the above data) is worth quoting verbatim:
If you really want to impact gasoline prices, you have to cut demand. You must actually cut your consumption. Instead of not filling up for a day, ride your bike to work or take public transportation during the next boycott. Those are measures that actually reduce demand, and will affect prices. But that's too hard or inconvenient, isn't it? We want to hold on to solutions like boycotting Shell, which will bring them to their knees. Do people really have such a poor understanding of supply and demand?

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