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Excerpt:
The following is from the Nov. 25, 2007, edition of The Pittsburgh Post-Gazette. Daniel Howard, chair of the Marketing Department at SMU's Cox School of Business, provided expert commentary for this story.


Gas prices aren't slowing U.S. motorists

By Elwin Green
Pittsburgh Post-Gazette

Now that gasoline has topped $3 a gallon, are Americans cutting back by driving less?

Not much, it seems. And the reasons why are rather simple, experts say.

"Gasoline is a commodity with inelastic demand," said Daniel Howard, chair of the Marketing Department at Southern Methodist University's Cox School of Business in Dallas. Demand for gasoline does not rise and fall in step with prices, which can change daily, because it is rooted in routines that don't change, like the need to go to work.

"One of the last things that is going to be cut back on with rising prices is driving," he said. . .

But why don't more people respond to higher gas prices by carpooling, or by using public transit?

It's psychological, Mr. Howard said.

People who carpool, he said, are typically "people who are very social, who don't mind talking and going with friends, and who are also very, very conscious about pinching pennies."

But most commuters "want time to clear their heads and to think their own thoughts."

For many people, public transportation is too inconvenient, he said. And psychologically, using public transit can be even more unappealing than carpooling.

"You have to understand that a person's car is almost like a mini-house," he said. "It's their possession, it's their freedom. Once you are used to driving in a car, taking public transportation means you have to downgrade your existence."

Read the full story.

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