Definitely Worth Writing Down

I asked: does The Green Shift become an easier sell now that gas prices have fallen from their highs of a couple months ago? Ted Hsu responds:

I think the answer might be very slightly yes. There is a concept from behavioural finance called 'anchoring'. When gas prices went up over the last few years, people felt that prices were too high because they were used to lower prices in the past, and did not take into consideration how the supply and demand for oil has changed in the past decade.

Now that prices have fallen somewhat, people may feel that gasoline is relatively cheap. Gas prices may not make the news headlines until a new high is reached. A tax on non-gasoline fossil fuels may be more palatable (in combination with the Green Shift's tax cuts)

Here's a good explanation of the psychology behind anchoring.

And, by the way, I've been reading Mr. Hsu's blog for about a month now. Very good stuff on green economics.