Value of time vs. Cost of gas

In Dynamist Blog: Angelenos for Higher Gas Prices Virginia Postrel notes the upside of higher gas prices … less traffic. We can do a back-of-the-envelope calculation. So let’s say her car gets 30 miles per gallon, and gas is $3 per gallon, she is paying $0.10/mile. If she were traveling at 50 miles per hour when gas was $2 per gallon ($0.067/mile) and 60 miles per hour now (at $3/gallon), she is traveling 20% faster (a one mile trip used to take 1 minute and 12 seconds but now only takes 1 minute). (I doubt average speeds have increased that much, but if she is noticing it, it is probably at least 10%).

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