Americans Whine About High Gas Prices – But Spending Habits Don’t Change Much


Written by Mat McDermott

Some interesting economic research on the impact of higher gas prices on Americans’ spending habits coming from New York Times: In short, even when energy prices are high, Americans aren’t markedly decreasing spending on recreation or other discretionary expenditures.

Higher gas prices had “no significant effect on the consumption of movies, bowling and billiards, casino gambling, and only insignificant declines for recreational camps, sightseeing, spectator sports and spectator amusements,” the article notes.

After comparing how Europeans have responded to comparatively much higher fuel prices (though still below what the full environmental cost, it’s worth noting) by taking more public transit (it’s available…) and living closer to the center of town (they have center of towns), versus Americans not embracing similar measures, Adam Davidson concludes: “If gas prices truly damage the quality of our lives, we have done a remarkable job of hiding it.”

According to NYT, gasoline and motor oil account for 4.4% of the average American’s spending, versus 10.4% on restaurants and entertainment, 2.4% on phone bills, and 1.3% on pets, toys, hobbies, and playground equipment, to give just a few comparisons.

All of which fits in nicely with something TckTckTck’s Kelly Rigg wrote yesterday in Huffington Post on how Europeans have reacted to the cost of petroleum products:

You may be surprised to find that at least by American standards, Europeans don’t complain that much. Where I live, in Amsterdam, gasoline is selling at around $8.50 gallon. But it simply doesn’t feature on the political agenda here. People are far more worried about the overall economic situation, jobs, and budget cuts. Maybe it’s just a pragmatic acceptance of the “new normal” — does anyone really believe that oil is likely to get cheaper in the future?

Maybe you think that Europeans are simply more stoical than Americans. But a comparison of American and European GDP suggests that gasoline prices have little bearing on wealth. Countries such as Luxembourg and Norway have comparable levels of GDP to the U.S., while paying roughly twice as much to fill their tanks.

There’s no correlation between gasoline prices and quality of life either. The OECD has a nifty little tool to compare this on the basis of several factors, and there doesn’t appear to be any connection between low gas prices and high quality of life, even when data for income and jobs is weighted more heavily than other factors.

Some of the difference in reaction no doubt has to do with the fact that it’s simply possible to be less car dependent in many more places in Europe than it is in the United States. TreeHugger has documented the car-centric American development model in all its glorious, glaring shortcomings many times so I won’t bother to recount that all and will assume you’re up to speed on that count.

But the thing that caught me in what what Rigg wrote is how high fuel prices are the “new normal”.

There’s something in that, expectations of normalcy, what is a “normal”, that I think accounts for Americans’ general reaction to rising fuel prices. It’s the upsetting of what we’re used to, more than the actual economic impact (assuming the economic research cited by the Times has accurately portrayed the situation), which gets people all riled up. More than the financials of it all, it’s a psychological divide as much as anything else.

A cup of coffee should only cost so much. A pair of jeans should only cost so much. Back in my day a gallon of gas only cost 99… et cetera, etc.

All of it a reaction entirely divorced from the reality of how much things should cost based upon a true social and environmental assessment of their impact, or from the actual changes people make in spending habits because of price changes.

This post was originally published by TreeHugger.


Related Stories:

Is Obama Running Out of Gas?

Did Paul Ryan Really Max Out Filling His Tank?

5 Things That Actually Determine The Price of Gasoline


Photo from finofilka via flickr


Margaret Paddock
M A Paddock6 years ago

Well people have to get to your public transportation and depending how far away they live it will be done by car. And then there is the issue of how they get to the next place when they depart. I had the problem of not having the privilege(?) of the buses running on the same schedule that would get me to work on time after I took the rail system to San Francisco.

You say we don't change our habits but it is not that easy to change an entire population that commutes 20 miles or more to work every day and then takes their children to different activities for school later and on weekends sometimes. It is just not possible.

Nor is it possible for everyone to buy a car that is hybrid because there are no gas stations that accommodate that nor can they afford the price of a low consumption vehicle or a Prius.

Please stop condemning the public. And as far as gas prices - Yes they CAN be lower if we would get away from the OPEC pricing. The only way to do that is to drill and sell our own oil here which this administration refuses to do.

Steve Solo
Steve Solo6 years ago

For what it's worth my plan to get funding uniquely for public transportation would be for each state to introduce a 10c a liter tax earmarked for pubT.

This progressive action would effectively put the tank of gas higher even more...this would cause the wall st speculators and oil companies to bring down the price of gas .. the tax money would remain constant...

Read more:

K. J. N.
Past Member 6 years ago

If someone can take public transit and it's not the problem for him then it's no need for more cars.

Adam C.
Adam C6 years ago

Care2, your new favorite greenwash ad campaign (Toyota) vehemently fought the California CO2 limits. You say that your advertiser policy is 'neutral' and is only limited when the product is harmful. Well, when a company fights legislation to limit the destructive results of their product, is that not harmful to all life on Earth? I continue to be disappointed in the willingness of Care2 to push destructive companies and products on us. Walk your talk Care2!

KS Goh
KS Goh6 years ago

Thanks for the article.

J.L. A.
JL A6 years ago

Americans have known since the 1970's that our prices are no longer connected to the value to consumers but rather oil company profits and supply fears as price influence of the commodities market that disconnects our gas pump price from the laws of supply and demand so we have lost our influence in this arena--hopefully this administration's initiatives will begin to return it to a more appropriate market pricing mechanisms.

Trudy Killa
Trudy Killa6 years ago

Europe has always been ahead when it comes to mass transit or using bikes vs the US that has found that they love their cars. The bigger the car, truck or SUV the better. Wonder how those who have their Hummers are feeling but I suppose if they bought a Hummer & didn't care about gas when they bought it, they don't really care much now either. I try to plan my trips so I am not driving every day when doing several errands in one day is better.

Debbie L.
Debbie Lim6 years ago

Interesting, thanks for sharing.

Sandra Barringer
Sandra Barringer6 years ago

I don't know what these Americans are thinking, and how they can afford to continue on spending as usual. As another writer said above, I've already cut back to the bone, and there's no more left to cut. I sold my car years ago, and travel mostly by bicycle. If I have to go out of town on business, I reat a car. Fortunately, our city is working very hard at turning a car-centric road system back into an all-user friendly road system. They're also trying to attract people back to the city in order to live closer to work. Apparently, this city is an exception to the rule of the car-centric/everyone else can go to hell attitude. Personally, I think this article really doesn't tell it like it is. I think there are many more people cutting back on everything, forget "entertainment".

Joy Mondary
Joy Mondary6 years ago