ABSTRACT
This chapter considers two different measures of the importance of fuel prices - their role in political action, and their influence on travel behaviour. It argues that the transport professionals in some sense underestimated the sensitivity of fuel price as a trigger of political action - underestimated the discontent which had become bound up with fuel prices. The raised the long established distinction, in economic theory, between 'luxury' and 'necessity', which depends essentially on two empirical observations - what happens to people's purchases of various goods as their income changes, and the price level changes. The sensitivity to fuel costs would be very low indeed - a ten per cent fuel price change would only cause less than 1 per cent change in traffic volume. The chapter describes two quite different reasons - with opposite interpretations - about what might follow from a tendency for the price elasticity of car use to decline.
