As oil (and gas) prices rise,
those in India are switching to camels instead of driving their cars:
“It’s excellent for the camel population if the price of oil continues to go up because demand for camels will also go up,” says Ilse Köhler-Rollefson of the League for Pastoral Peoples and Endogenous Livestock Development. “Two years ago, a camel cost little more than a goat, which is nothing. The price has since trebled.”
The economics of it then...how does a increase in the price of oil lead to an increase in the price of camels?
- The price of oil increases.
- Oil is a complement good for cars.
- Demand for cars falls, putting downward pressure on car prices.
- The falling car prices do not offset the rising cost of driving the car.
- There is an increase in demand for substitute means of transportation, including camels.
- The price of camels increases.
Hat Tip:
Kids Prefer Cheese.
