Running on Fumes

Is gasoline a Giffen Good?
This very well written essay from the Nation magazine shows how rising gas prices threaten exurban communities.

Excerpt: Kerr now changes her own oil and tries, as best she can from reading a few car maintenance books, to give her Explorer its tuneups. "I can't afford to go downtown to have someone else do it for me," she explains. "I've thought about selling some of my stuff. I have some antique radios from my grandmother. I've been putting that off for a year now. I can't fill my tank. I haven't been able to fill my tank in a year or two. I do $20 here, $20 there. I do without food to get gas, pretty much regularly. There's never any breakfast. Nobody eats breakfast in my house. My mom feeds me lunch after she gets off work. Maybe two times a week we go without dinner. Eat nothing. My boss was nice enough to let me cash in some vacation time last month, so I had enough to buy some groceries."
In a nutshell, Kerr's experience shows up the fallacy of the laissez-faire notion that free-floating prices alone are a fair way to regulate consumption of a scarce commodity like gasoline. While higher prices might stop some tourists from driving up to Castle Crags and might curtail the discretionary gas use of the middle classes, as long as people live in regions like Siskiyou County and commute to far-away jobs in places that are hard, if not impossible, to reach by public transportation, these people are going to need gas. And as long as they need gas simply to continue working, they are going to do whatever it takes--short-changing themselves on food and medicine, charging the gas on credit cards, deferring car repairs or upgrades to better, more fuel-efficient vehicles--to keep their tanks full. After all, entire communities and lifestyles and job choices and consumption patterns have been crafted over the better part of a century on the basis of cheap and plentiful gasoline. Suddenly change the equation without offering any government relief and, even though gas remains cheaper per gallon than in much of the rest of the world, the relative difference will prove disastrous.