Big Changes Loom If High Gas Prices Hold

Photo: Don FullertonCHAMPAIGN, Ill. – Americans’ usual fuel-saving shortcuts could give way to dramatic changes affecting the nation’s auto, housing and even job markets if gasoline prices stay at record highs nearing an average $4 a gallon nationwide, a University of Illinois economic expert says.

“For most of us, we’re not going to change anything fundamental right away,” said Don Fullerton, a finance professor and former deputy assistant secretary of the U.S. Treasury Department. “We may cut out a few discretionary trips or shift household spending and just pay for the gas for a while.”

But if historic pump prices hold, cash-strapped motorists will likely begin making broader changes that could potentially reshape lifestyles and buying habits, said Fullerton, a leading researcher on the economic impact of environmental regulations such as gasoline taxes and pollution mandates.

He says lingering high prices could hasten a shift from gas-guzzling trucks and sport-utility vehicles to hybrids and smaller, more fuel-efficient cars