Thursday, July 27, 2006

Gas Prices

I disagree with the idea that gas is an inelastic good. Like John, I drive significantly less due to high gas prices. The claim that people need their car to get to work is not an argument for inelasticity, a person chooses where they live. I choose to live close to my job/school so I can walk or bike in. Sure, both are less convenient than driving but so is paying $35-$40 to fill up my car every other week. I know people who live closer to school than I do yet still drive in every day. I think that the only truly inelastic good is food (and maybe shelter).