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  3. American Economic Journal: Applied Economics
  4. April 2022
  5. Formative Experiences and the Price of Gasoline

Formative Experiences and the Price of Gasoline

  • Christopher Severen
  • Arthur A. van Benthem
American Economic Journal: Applied Economics
vol. 14, no. 2, April 2022
(pp. 256-84)
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Abstract

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.

Citation

Severen, Christopher, and Arthur A. van Benthem. 2022. "Formative Experiences and the Price of Gasoline." American Economic Journal: Applied Economics, 14 (2): 256-84. DOI: 10.1257/app.20200407

Additional Materials

JEL Classification

  • D12 Consumer Economics: Empirical Analysis
  • D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
  • L71 Mining, Extraction, and Refining: Hydrocarbon Fuels
  • Q35 Hydrocarbon Resources
  • R41 Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
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