Skeptical Environmentalist

Ah, the Income Effect

By Matt Singer, 5-11-05

Clark Williams-Derry discovers the income effect while looking at CAFE standards. As it is cheaper to drive, people do it more. That effect is a predicted one and I think anticipated in a pretty widespread way. But Williams-Derry emphasizes the secondary effects of that primary effect: increased sprawl. As people are able to drive more, they plan to drive more and living further from the center of a city seems less daunting.

Now, as I've made clear, I do not understand that mindset. I currently live right on the river in the heart of Missoula. My dream Missoula home would be a few blocks away, in the Millenium Building. My own experience is that density is a wonderful thing. My cohorts on this planet all seem to want to run away from each other, though.

Regardless, for anyone interested in secondary impacts of increasing fuel efficiency standards, but who wants to read it from an enviro, check out Williams-Derry's piece.

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