Maybe it’s only because I live in suburbia, and have been a runner for 39 years, that I haven’t noticed people substituting walking for driving. If car-substituting walkers are out there, they’re invisible.

“I’d love to see a law passed that required car dashboards to include a more accurate per mile cost.”

About 20 years ago there was a move in California, where a lot of drivers had no insurance, to roll the price of insurance into gasoline – everyone would buy their insurance at the pump. It died. But this is still a great idea. It turns a large fixed cost into a variable cost that can be reduced by not using your car. The other large cost is depreciation. A car that isn’t driven isn’t depreciating mechanically, though it may be depreciating in safety and style. There’s a huge incentive to walking, in not driving, if car costs are not permitted to run while the car sits. Sales and property taxes are the other fixed costs and they too could be rolled into the price of gas.

Cars are status symbols, like yachts, or everyone would be driving the cheapest cars available. Not much rational can be said about status symbols, it’s a pecker-measuring contest, no one wants little cars that are efficient or big cars they’re not going to drive because today they’re going to walk to lunch.

You are right that the cost of gas is only a part of the cost of car miles. Your right that people’s behavior would be different if they had a clearer signal about what the car is costing them. There are a number of consumer protection regulations that work by improving the quality of the signal available to the consumer, for example the fair lending laws, and I’d love to see a law passed that required car dashboards to include a more accurate per mile cost.

Walking doesn’t happen when gas prices increase. Higher gas prices reduce driving in the same way that time-of-day parking reduces driving. People are only sensitive to the cost of driving at the margin (the price of gas), mainly and regrettably because they have no idea what the actual cost of driving is. The downside is that if they actually knew how much it cost to drive a car ($0.80-$1/mile), then a rise in the price of gas wouldn’t change their driving at all. They would still drive to a restaurant to eat. Starving children in China, and I paid for it, I’m going to eat it is what makes people fat.