May 24th, 2008An article in the WSJ yesterday discusses the effects of high gasoline prices on microeconomics - individual behavioral decisions. It’s something everyone with an automobile considers - when should I opt out of using my car for everyday driving? The Journal noted that at $4/gallon, people are already scaling back demand.
Consumers have already taken note, with U.S. gasoline demand down 0.6% this year compared with the same period in 2007, according to the Department of Energy.
The erosion in demand is likely to accelerate if gasoline prices shoot above $6, but a radical cutback in consumption will occur only if high prices weaken the U.S. economy further and contribute to increased unemployment.
So, what happens when gas hits $6/gallon? (IMO, we’re just a couple of years from that price.) I think at that price, telecommuting and teleconferencing will hit hockeystick growth. At a corporate level, businesses will probably be more selective when it comes to corporate travel, and will hopefully encourage virtual meetings and teleconferencing. I wonder if they’ll allow their employees more more latitude in telecommuting, too.
I don’t see why not - the technology is here today. For example, yesterday while up here in Tahoe, I took part in a three-way conference call between co-workers in San Francisco and a partner in Oregon. From my perspective, there was no drawback to being here in the mountains, nor for our partner to be in Oregon. All of us used Adobe Connect for screen sharing. It’s a no-brainer to use this technology, and in some ways, it’s faster to set up a screen sharing session between remote meeting participants than to gather a bunch of people in the same office into a meeting room and get a projector set up.
