3/12/2008

It's All Relative

Rising gas prices--they are always on our minds! The article "Record Gas Prices Push Energy Spending to Near 1980's Levels" brings a different perspective to this headlining issue. Adjusting for inflation, higher wages, and better fuel efficiency, some say we have nothing to complain about when it comes to the price of gasoline. Adjusting historical figures to 2008 dollars, we are actually spending less for fuel than we have since the 1980's. However, when we go to the gas station, we aren't thinking about what we paid for gas 15 years ago compared to our wages back then, rather we are thinking about how rapidly and dramatically prices have risen recently. It hasn't been a steady increase similar to the rise in wages. Rather it comes sporadically with prices climbing $0.25 to $0.50 in a matter of weeks. This highly volatile fluctuation seems to be more the cause of complaints than the actual price.

Another point to consider . . . . People will complain all day long about the price of gas, but I don't think the rising cost has really taken a complete toll yet. How many gas-guzzling vehicles do you pass on the highways every day? Stand in one spot on Cedar City's Main Street and take a quick tally of the percentage of vehicles that pass by that are fuel-efficient vs. gas hogs. Despite rampant complaints about inflated gas prices, people are continuing to purchase and drive big trucks and SUV's that average less than 10 miles per gallon. This indicates to me that the high energy costs haven't really hit us in the pocketbook yet. A more substantial change in behavior (i.e. driving more fuel-efficient vehicles) will be a better indicator that we really are suffering from the price increases.

3 comments:

Anonymous said...

I agree that the volatility of gas prices seems to be what bothers us more than the actual cost. The low prices lure us into believing they may stay low. It is amazing to me that SUV sales are up and I wonder when gas prices will make a difference again - as they did a few years ago.

Olivia said...

Can I get an AMEN for Grace! There are mountains of data that show the hype of gas prices as just that; hype. For those who would like to see some kind of legislative answer I ask one thing; take a small stroll down memory lane to the Carter years and America’s manufactured energy crisis. We should stop asking others to cast our vote for us when we dislike what is happening and use the vote that rears the most power of all, our dollar. If you don’t like it get a bus pass!

Dr. Tufte said...

This all seems fairly reasonable.

Gas seems to be something that we feel free to complain about - I'm not sure why.

One would think that if we are so hurt by high gas prices ourselves, that we'd be more sympathetic to oil companies, OPEC countries, and gas station owners when the prices drop.