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Friday, January 21, 2011

Are gas prices high?

Jim Treece at Automotive News had a neat little column in today's Automotive News ("Gas too high? Aw, stop griping"). I'd played around with data in the past; here are two graphs. One presents the inflation-adjusted price of gasoline, from 1919 through 2010. Prices are up -- but we're coming off of almost 20 years of the lowest gasoline prices in US history. The second adjusts in a different way: GDP per person, using a 2000 hour work-year to ask how many minutes it takes to buy a gallon. I could have used average hourly compensation (but what of retirees?) or average consumption; that would change the details but I don't think it affects the basic picture. And any such method would have its own drawbacks.
Mike Smitka