When gas prices soared in the mid 2000s, it affected our driving and what vehicles we bought. But more precisely, what happened when gas prices rose to almost $4 a gallon? N.C. State University economist Mike Walden summarizes what studies reveal.
“We do have several studies that are coming out now … because we are far enough away from that period that we have data. And we have a brand new study from the American Economic Association, which focused on the impact of these high gas prices on the sales of new vehicles. And one impact they clearly found — and I think most people would have expected — this is, that those higher gas prices really hit hard the sales of large SUVs. They went down tremendously. In fact, the rising gas prices between 2002 and 2007, the study shows, accounted for half of the decline in large SUV sales over that time period.
“Interestingly, though, … the rising gas prices, based on this study, had little impact on the sale of small SUVs. And some of that may be the fact that people shifted out those really big SUVs. They still wanted the SUV feel, so they bought smaller SUVs.
“The study also found that the effect of miles-per-gallon of higher gas prices was not as great as perhaps we would think. They found that for every $1 increase in the gas price, fuel economy increased by less than a mile per gallon.”