Formative Experiences and the Price of Gasoline
Formative experiences shape behavior for decades. We document a striking feature about those who came of driving age during the oil crises of the 1970s: they drive less in the year 2000. The effect is not specific to these cohorts; price variation over time and across states indicates that gasoline price changes between ages 15–18 generally shift later-life travel behavior. Effects are not explained by recessions, income, or costly skill acquisition and are inconsistent with recency bias, mental plasticity and standard habit-formation models. Instead, they likely reflect formation of preferences for driving or persistent changes in its perceived cost.
Non-Technical Summaries
- Americans who came of driving age during the rapid gas price increases and long waiting lines of 1980–81 were driving...
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