As PBS reports, transit ridership appears strong even though gas prices have been falling. Or at least ridership was strong through September, the last reliable count:

More than 2.8 billion trips were taken from July through September—an increase of 6.5 percent over the third quarter of 2007. In that time, there was an increase in ridership of 8.5 percent on light rail (streetcars), 7.2 percent on buses, 6.3 percent on commuter rail and 5.2 percent on subways.

Last year, 10.3 billion trips were taken on U.S. public transit—the highest number of trips taken in fifty years.

But how can this be? Hasn’t everyone heard that falling gas prices mean that we’ll soon be driving Ford F-150s on two-hour commutes from the exurbs? Won’t gas consumption start increasing dramatically?

Maybe, but I think not. At least not right away. Here’s why…

  • 1.) Demand does respond to price—really it does — but there’s a lag time. The big changes in demand take a while to kick in. For example, when prices rise you maybe cut a few discretionary trips right away, but you probably won’t buy or sell a car overnight. You may tweak your work schedule to telecommute on Fridays, but you likely won’t move your residence or job location right away.

    (An aside: consumers have historically seen gas prices as inherently volatile and unpredictable: if prices are high today, they’ll likely be lower next month. I’d bet a pile of money that consistently high prices—and the belief that prices will remain high—can change consumer response in not-entirely-understood ways.)

    2.) Income may matter more than price. (In economist-speak, income elasticity of demand is probably higher than price elasticity of demand when it comes to gasoline.) In other words, people respond to gas prices, but they respond even more to changes in income. When wages go up, people drive bigger cars and they drive them more miles. But when wages go down—as they almost certainly are now—people respond by trimming their sails. We tend to opt for efficiency and look to save a few bucks by taking the bus when we can, maybe even ditching a car altogether.

    These reasons were often supplied to assert that Americans would never, ever, ever stop guzzling fuel. But of course when gas prices spiked in mid-2008 it turned out that Americans are pretty darn resourceful. (Though it did take a while for the resourcefulness to have a measurable effect.) We drove fewer miles, and we drove slower. We started taking transit in numbers. And when we drove we switched to our more fuel efficiency vehicles. In short, for all these reasons and some others, gasoline consumption dropped.

    Naturally, these same things can happen in reverse. But in order for them to we’ll probably need to see not only low prices but also a strong economy—and even then we’ll need time to see the effect. Folks who moved to a walkable neighborhood won’t soon be leaving. And some folks who traded in a car for a bus pass will find that they prefer getting about by transit. (That is, if transit service can be maintained in an era of crushing budgetary constraints.)

    Only time will tell. It will be interesting to see what fourth quarter transit ridership is like. My guess is that it stays reasonably strong. Your predictions in the comments, please, and I’ll meet you back here in ’09 for an update.