Here’s a great article about the cost of gas. This is something I researched a little in microeconomics and decided to write on. The press wants us ‘Average Joes’ to think we’re in a major crisis with gas prices. I think otherwise. Read the article “Sky-high gas prices? Not really.”

The numbers given in the media don’t take into account inflation. Maybe they should cause a big stink about the rising cost of candy. Back in the day, you could get a handful of candy for a penny. Good luck getting that deal today.

As stated in the article, money is relative to the time period. “Sure, the $2.03 being charged at the pump today seems high. But in actual financial terms, it's a lot less onerous than the $1.25 a gallon motorists were paying in 1980 -- a whopping $2.80 when translated into 2004 dollars. (Adjusted the other way, today's $2.03 pump price is equal to 89 cents in 1980 dollars.)”

We're getting one heck of a deal! We're paying about 39% less than twenty years ago! Seems the whole gas price crisis is nothing but a media fallacy.


Dale said...

I think this is very interesting. I have not heard of this before, but it makes perfect sense. Maybe we are just so spoiled that we lose perspective on what is really going on. Hopefully companies can become more effiecent and oil become an easier resource in order to lower prices.

Bart said...

It may be a fallacy, but when I have to pay $50 to fill my gas tank and not making much more than minimum wage, $2 a gallon seems extremely high to me.

Ace said...

This is a great article and it really got me thinking. I think part of the reason people have such a problem with rising gas prices is because they are on display. You can't hardly go anywhere without driving by a gas station and what do you see under the store name, the prices of gas. It is imprinted in peoples minds and they notice a five cent increase a lot more then a $.25 increase on their meals. Which by the way is what Panda Express has done over the last two years.

Ralph said...

The information in the article was a little manipulated. Gas is cheaper now then in the 70’s but there was and oil embargo then. The inflation statistics were misleading too. The inflation from the 50’s to now and the gas prices to now is correct, but if you compare the early 90’s inflation rises to gas prices, gas has raised considerably. I remember seeing gas for under a dollar in the 90’s, and I’ve seen it at $2.50 at the same station in less then ten years later. I don’t think gas is cheap, but I believe gas will get much higher so we should enjoy what it is now.