Boom, Bust, Echo and gas price sensitivity

Cross-posted from
The Cost of Gas Today by Will Gotshall-Maxon

Friday’s Globe and Mail featured a prediction by Jeffrey Rubin, the CIBC World Markets economist, that damage from Hurricane Gustav and other intense storms this season could cause a sudden spike in gas prices to $1.75 a litre.

Every time there is a price spike, the media runs to the local gas station to cover the “pain at the pumps”. But does that pain translate into a change in behaviour? How much of an impact do gas prices have on the commuting public in the GTA? Do increasing gas prices cause people to make different personal transportation decisions, or are households just absorbing the extra costs?

It appears that gas prices are affecting vehicle purchasing decisions (sorry GM), but are consumers switching from private vehicles to other modes of transportation? I would love to see the research on that. (Perhaps our friends at Metrolinx have some sources they can share? If readers know of recent research on this question, please leave a link in the comments.)

Surely demographic factors influence gas price sensitivity and the substitution of one mode of transportation for another. It makes sense that household incomes will affect price sensitivity, with the working poor being hit hardest. At the same time, many service workers need to use private vehicles to get to or perform their work (i.e. not the GO train Bay Street crowd) and have few alternatives. This creates a political problem that will bring calls for action.

But I also believe that there is a relationship to a another familiar demographic trend with political and policy implications: Boomer parents versus their Gen Y children.

Older upper middle-class car owners who live in the bedroom communities surrounding the City of Toronto and other major urban centres in the 905 will not be terribly affected by increasing gas prices – at least not enough to effect a historic shift to more sustainable modes of transportation. In addition to enjoying relative affluence, my guess is that this group have deep-seated cultural habits and experience systemic barriers that make switching costs relatively high.

Meanwhile young, newly urban professionals, creatives and knowledge workers who are repopulating our city centres (like Metronauts writer Adam Schwabe) are moving en masse to enjoy the vibrancy of city life, reduce their carbon footprint and increase the quality of their lives by spending less time in the daily commute. Generation Y workers, the Echo, the Millennials – or whatever you want to call them – are changing the workplace, the urban fabric and the nature of the transportation problem. This is more than a stage of life question – research points to a values-driven shift towards more sustainable choices by young people for environmental and financial reasons:

Workers under the age of 25 in the Toronto region use public transit 30.8 per cent of the time, while a further 9.5 per cent walk and 1.5 per cent use a bike.

That’s a considerably higher reliance on environmentally friendly means of getting to work than the average commuter in the Toronto region, who commutes by public transit 22.2 per cent of the time, by foot 4.8 per cent of the time and 1.0 per cent by bike.

Which of these two groups receives the lions share of attention in the media and the political conversation that surrounds the work of Metrolinx planners and the development of its Regional Transportation Plan? I don’t think anyone should be surprised to see plans and investments that reflect the needs of the suburban Boomer commuter class, but what of Gen-Y and the New Urbanists?

Ultimately, and historically in this region, the allocation of scarce funding is a question of politics, not planning. So here’s the political question:

Should governments dull the pain of those making energy-intensive choices about where they live and work and how they choose to travel, or should governments reward those that make more sustainable choices with the required supporting infrastructure, planning policies and design of dense mixed-use city centres?

I believe that the Gen-Y shift to urban life is a generational opportunity to shift behaviour and a leverage point for systemic change, if our planners and politicians can find a way support and embrace it. But can planners and politicians hear their voices?

Image by Will Gotshall-Maxon

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