As Americans enjoyed a dip in fuel prices for Thanksgiving, a reminder that travel alternatives will matter if prices spike again

If pump prices again reached painful levels, most Americans say they would use a different form of transportation, or just drive less. Only 20% of consumers say they would switch to a smaller, more fuel-efficient or electric car. 

Gas prices dropped in time for the holiday season, with the South and Midwest seeing prices as low as $2.28 to $2.52 per gallon last week. But as a decade-high 54 million Americans hit the road travelling 50 miles or more for their Thanksgiving plans, it’s worth pondering our options if the country were again hit with much higher oil prices.

One of the questions we ask in the U-M Energy Survey is about how Americans would change their travel choices if they felt really pinched by gasoline prices. Using nationally-representative data from the past five years, including periods when pump prices were much higher than they have been recently, here’s what we found.

The most frequent response, given by 46% of American consumers, was that they would use a different form of transportation to get around. That could include buses, trains or other forms of public transportation as well as biking or walking. The number two choice was combining trips or driving less, the answer given by 36% of consumers. 

Notably, only 20% said they would drive a more fuel-efficient vehicle, such as a smaller car, an electric vehicle (EV), or even a motorcycle, moped or the like. This figure stands in stark contrast to the high levels of publicity around efforts to rapidly shift mass-market consumers to alternative powertrain technologies. 

Source: University of Michigan Energy Survey data through Summer 2018

Early this year we added a specific option for respondents to denote whether they’d use a ride-hailing service such as Uber or Lyft, or what is termed “mobility as a service,” if gasoline became too costly. Only 2% of consumers said they would turn to these options, or use home delivery alternatives (such as ordering things online) or even ditch their cars altogether if gasoline became too expensive.

While most Americans likely won’t be abandoning their personal cars and hailing a ride-for-hire to get to where they need to go even if pump prices spike again, the use of such services is growing among many millennials, who seem happy to ditch car ownership and find other ways to get around. Moreover, ordering everyday goods from Amazon and using other home delivery options are increasingly popular. These services clearly offer value to consumers due to their convenience. Nevertheless, our survey results suggest that, at least so far, few consumers say they would turn to new mobility services if fuel prices began to pinch. 

These survey responses are broadly consistent with economic studies of gasoline prices and consumer behavior showing that higher fuel costs result in both decreased driving and increased fuel economy. This signal of expected behavior change, or elasticity to fuel price, is why a carbon tax or a cap-and-trade program that covers the transportation sector is one way that policy makers could move the needle on alleviating transportation emissions. 

Regional differences in expected travel behavior changes

Gasoline prices can vary considerably state-to-state. Likewise, some regions have more public transit available or higher presence of shared mobility services than others. Using the same pooled U-M Energy Survey data, the graph below shows consumers’ top three responses broken out by census division, with all central U.S. regions combined given the similarity in their responses. We find some significant differences across the country in how consumers expect they would change their travel behavior if faced with too much pain at the pump. 

Source: University of Michigan Energy Survey data through Summer 2018

Roughly 55% of Pacific Coast (California, Oregon,Washington) residents said they would start walking, biking or using public transit more. Interestingly, consumers located in Mountain region states were next most likely to give such a response. Another obvious way to mitigate high fuel costs is to just drive fewer miles in one’s own vehicle, and regions varied notably on the extent to which consumers said they’d likely drive less if fuel become more difficult to afford. Residents in central region states (Dakotas and the Midwest down to Texas through Alabama) were least likely to say they would switch to different modes of transportation while being most likely to say they would respond by driving less. 

One transportation alternative of interest is switching to a more efficient, smaller or electric vehicle. New England and Pacific consumers were the most willing to make such a choice. This heightened willingness could reflect greater awareness of such options in these regions, where a number of states have programs to promote EVs and build networks of charging stations. Moreover, the denser populations in coastal areas are better matched well for battery ranges. On the other hand, residents in the Mid-Atlantic states (NJ, NY, PA) were least likely to say they would use a smaller, more fuel-efficient or electric vehicle. Less surprisingly, a low level of interest in such options was found in the central states, which generally have seen less promotion of alternative vehicles and supporting infrastructure, and where consumers may feel a need to have more highly capable vehicles and be able to drive long distances. 

American travel behavior is in flux as new options emerge and transportation becomes part of the internet of things. Lyft is rumored to pursue an IPO next year while autonomous vehicles are eyeing center stage. How Americans make these choices down the road will have significant implications for transportation sector greenhouse gas emissions. And if higher prices return while new mobility alternatives become more available and accepted, we may see the acceleration of a new era in transportation that, in the minds of most consumers, has barely begun to unfold. 


Americans’ concern about effect of energy use on environment reaches five-year, record high

As the saying goes, the more things change, the more things stay the same.

Both are certainly the case when it comes to the University of Michigan Energy Survey’s latest data from summer 2018. We found last November that while consumers were less concerned about energy affordability, they were increasingly concerned about the impact that energy use has on the environment. That concern is now at a five-year record high.

Energy-related concerns

These latest results continue the trend of the growing degree to which Americans worry about how energy use affects environmental conditions including air quality, water quality, global warming and personal health. As shown in the adjoining chart, the level of environmental concern has reached a five-year high. It also reveals a notable contrast between consumer environmental concerns about energy relative to their concerns about whether energy is reliable and affordable.

Nationally representative, the U-M Energy Survey has tracked U.S. consumers’ attitudes about energy impacts and related affordability, reliability, and environmental concerns since the fall of 2013. Survey questions are administered each quarter, tacked onto the end of the Surveys of Consumers, or “SCA”, as a rider. The SCA is renowned for its consumer sentiment index. (See our Methodology page for details and links to the exact question wording.)

Trends in consumer concerns about energy use and environmental impact, affordability and reliability

Source: University of Michigan Energy Survey data through the most recent quarter (Summer 2018)

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