Carpe Diem: Demand Curves Slope Downward: The Largest Monthly Decline in History for Miles Driven
The Largest Monthly Decline in History for Miles Driven
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6 responses to “The Largest Monthly Decline in History for Miles Driven”
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Sweet – lower demand can only mean lower prices.
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Maybe. Since the supply is held by a cartel they frequently fail to act according to market dynamics.
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At the very least it’s a tangible signal that there’s some elasticity in demand.
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This is a good example of bad use of statistics. The graph distorts the information by stretching the X axis. If the author had used a more reasonable scale, the dip at the end would hardly show.
Also, you cannot validate a theory on a couple using observations for a few months. It probably just reflects the overall slowdown in the econcomy. I would like to see a graph of petrol prices right across the time period on the graph, before drawing serious conclusions about the demand curve.
The graph does not demonstrate a lifestyle change. I suspect that most Americans will leave the car in the garage for a few months, then put their foot right back on the throttle again. -
It probably just reflects the overall slowdown in the econcomy.
If that’s the case, then why are there not other similar downturns in the graph when the economy has been worse than it is now?
Isn’t the point that this is the largest ever recorded downturn…irrespective of how the data is “stretched” visually? -
Always be suspicious of a graph measuring quantities that doesn’t have zero as a baseline. I agree that the graph is distorted but I suspect he has presented it this way so that it is clear that there was a decline.
I don’t think Perry is making a claim about long term trends from this. I think he is just noting that prices finally hit a level where people altered their behavior. It is true the SUV sales are way down and gas efficient car sales are up. We will see what the future holds.
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