May 31, 2006

Driving and crying

from - RSA

I filled up my car today at the gas pump. Total cost: about $30. I realized, in thinking about it, that while I find the topic of rising gas prices interesting in the abstract, it hasn't seemed to affect me much personally. (I already have a very low opinion of George W. Bush, independent of gas prices, apparently unlike the average American.)

Here's one possible explanation for my attitude. My car gets about 30 miles to the gallon. I drive it about 9,000 miles a year. With gas around $3.00 a gallon, that works out to $900 per year. If the average price, say, three years ago was about $1.50, then I'm paying twice as much as I used to, an extra $450 per year, or $37.50 per month.

Is that a lot? It could be that I'm not representative. Let's check out the numbers for the average person in the U.S. The average car is driven about 12,200 miles per year, and the average new car/SUV mileage is 21 mpg. Using the same computation as above, that gives $1740 per year, or $145 per month. That's an extra $72.50 per month, compared with three years ago. Let's estimate the after-tax income of this average person (household, actually) at a conservative $35,000. Instead of paying 2.5% of this in gas, it's up to 5%. Hmm.

The numbers above are in non-adjusted dollars; they're just ball park estimates, and of course the "average person" doesn't really exist. Still, I thought it would be interesting to see where potential boundaries could lie between those affected and those not affected by the price of gas.

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Posted by RSA at May 31, 2006 11:45 AM
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