1/01/2012

A chance to see how elastic is the demand for using cars?

I frequently hear people discuss how much driving will be reduced from increases in the price of gasoline. One of the problems with measuring the impact is that so many other things are changing at the same time. That problem might not be too huge given that we still have so much of a variation in the price of gasoline over time. Still these huge increases in NJ road tolls over the last few years do significantly increase the price per mile of travel and it allows one to compare the changes versus other highways at the same time that are facing the same increase in price. From the WSJ:

. . . Tolls on the New Jersey Turnpike will go up by 53% in the new year; on the Garden State Parkway, they will jump about 50%.

Drivers could be forgiven for having forgotten the new cost: The increase is the second of a two-phase hike adopted by the New Jersey Turnpike Authority and approved by former Gov. Jon Corzine in 2008. Tolls went up by about 40% that year.

Still, the authority advertised the hikes on digital signs on the highways and fliers passed out at toll plazas, said spokesman Thomas Feeney. Of the dozen New Jersey drivers interviewed at the Thomas Edison rest stop here on Friday, most knew that the increases were coming.

"I take highways everyday, so I don't have a choice. It's crazy," said Karan Hannalla, 57, an East Brunswick customer service manager who commutes 26 miles a day to Cranford. She will be paying about $2.50 more a day to commute to and from work. . . .

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