Car Prices Soar, Drivers Stay on the Road

Los Angeles traffic keeps moving at a steady pace even as fuel costs climb higher than ever.

Key Findings

• Highway Traffic
• I‑405, I‑10 and I‑5 showed almost no change in miles driven over a two‑month period that began after the Iran conflict escalated.

• Most freeway segments experienced only minor fluctuations: some spots rose about 9 %, others fell near 3 %.

• Price Elasticity
• The pattern echoes long‑standing studies showing gasoline demand in the United States is largely inelastic.

• Drivers keep routes and schedules unchanged, even when the price of a gallon jumps dramatically.

• Historical Context
• A 2006 NBER paper noted motorists were less responsive to price hikes in the 2000s than during the oil shock of the 1970s.

Current Fuel Prices

• Average Price (Los Angeles): $6.07 per gallon
• Roughly a 28 % increase from the previous year.
• About 36 % above the national average (AAA data).

Takeaway

Despite soaring fuel prices, Los Angeles traffic remains remarkably steady—an enduring testament to the inelastic nature of gasoline demand and the city’s deep reliance on private vehicles.