I assume that there is a big difference between long and short run elasticities. I may not junk my new Hummer because of high gas prices, but I would be less likely to buy a new one.
On Thu, Jun 10, 2010 at 10:07:41AM -0700, Gar Lipow wrote: > > Don't have time right now to make a real post. But I've written a lot > on elasticity in the past. And the empirical data shows that price > increases are a weak tool in reducing use.Large prices increases > result in comparative low reductions in demand. But that is not the > same as saying there is ZERO demand reduction. The same empirical data > shows weak responses and very definitely not no response. In fact I > don't think there is a single study ever that showed no response. (And > given the immense quantity of data showing responses, I would be > extremely suspicious of any outlier showing zero response.) As to > desirability of price increases - that depends on context and > implemenation. My fear of price increases is that focus on price > distracts from the large scale public investment and command & control > regulation that are more urgent that will be responsible for the > overwhelming majority of emissions reductions should we ever have to > political power and will to implement a real emissions reduction > policy. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
