Study: Gas Price Hikes Spur Efficient Car Sales, but with Two Year Lag

(Alex Goldmark, Transportation Nation) Higher gas prices do cause higher hybrid vehicle sales, just not right away. A new study finds there's a two year lag between fuel price changes and car sales.

The study in the Journal of Economics and Economic Education Research finds that a 10 percent increase in gas price, decreases the demand for SUVs by 13.7 percent and increases the demand for Hybrid cars by 9.1 percent. The price of a gallon of unleaded has increased more than 30 percent in the past year, according to AAA.

"Gas price has a direct impact on vehicle choice... However, this impact is not immediate and there is a time lag between price changes and vehicle choice," authors Mansoureh Jeihani and Soheil Sibdari write.

The study also treats picking a new vehicle as a long term choice, not an impulse buy based on the data.

The study also verifies other research that says people won't stop driving, or drive fewer miles, when gas prices go up, but they will use more fuel efficient cars, especially if the household owns multiple vehicles.

(Via The Daily Stat)