Surprise: Edmunds analysis indicates correlation between gas prices and hybrid shopping
Edmunds.com is one of the go-to sites on the net when people are shopping for a car and they want to compare specs and prices without having to visit a dozen different car dealers. With all visits they get, Edmunds has a lot of data on what people are looking for and when. With all that data stored on their servers it was natural for them to do some analysis on it. They compared what vehicles were being shopped for and when against the price of gas at the same time.The results were shocking. You might be surprised to learn that when gas prices go up, people shop for more efficient cars. Actually the relationship is not quite that simple. With prices below $2.80 a gallon the relationship is fairly linear. Above that price point, things change much more aggressively. The consideration of vehicles like hybrids goes up dramatically while mid-sized SUVs plummets. This would seem to correlate well with the declining sales of vehicles like the Ford Explorer and Chevy Trailblazer. There's nothing here that anyone should find to terribly shocking, but it's interesting nonetheless.
[Source: AutoObserver, thanks to Srini for the tip]
Reader Comments (Page 1 of 1)
UH2L 1:00PM (1/31/2008)
It's sad that people are so short-sighted and that the immediate gas price affects their shopping behavior. But then, I shouldn't be surprised; look at the adjustable rate mortgage mess. Some of it stems from a similar mentality, (although the lenders and regulators share much of the responsibility).
Atul
http://www.thingsivenoticed.com
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steven 2:49PM (1/31/2008)
As the post title infers, yeah, real big surprise here, and I don't doubt there is some truth to this scenario, but there are two unanswered issues with this type of analysis:
I haven't taken a stats course in a couple years, but most of the inference models that have I worked with had limited usability in predicting results that were significantly outside of the range of the sample values used to generate the model, unless of course you
have a strong PRE-ANALYSIS evidence (a hypothesis is not considered evidence) to suggest that the relationship continues outside the sample range. Using the model for interpolation of the relationship between gas prices and hybrid shopping is fine, but it is usually not valid to extrapolate the relationship using this type of statistical methodology. In this case, "just $1 [more]..." is quite a bit outside of the sample range which would lead to a considerable level of extrapolation error. It would not have been too hard to provide the estimated error rate, unless it really made the numbers look bad for the author.
Second, does anyone know how the types of cars researched on Edmunds actually align with the final vehicle purchase? If this correlation is low, then the aforementioned analysis means even less.
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dave 3:35PM (1/31/2008)
I heard MANY people at work say " gas is down about .10 so I'm going to buy a new SUV now". Most people are amazing that way, using just about anything to justify what they really want to do. When gas does over five dollars that's when there will be a permanent sea change is car buying attudes.
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motorman 11:55AM (2/01/2008)
what do you think gasoline will cost when a lot of 50MPG cars hit the roads and the amount of taxes the gov't collects goes down because we are using less fuel. there is already talk in congress of raising the tax 40% now just to fix the infrastructure. it is never going to cost you less to drive you car no matter what your MPG turn out to be
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