Measures of Gasoline Price Change

[Excerpt] No prices are more visible to the public than gasoline prices. Even for people who don’t have to fill up a tank on a regular basis, gasoline prices are likely to be in their view, posted every day. In addition, no prices have more of an impact on short-run movements in the Consumer Price Index (CPI). Gasoline prices are so much more volatile than other CPI components that, even though gasoline makes up less than 6 percent of the CPI, it is often the main source of monthly price movements in the all items index. Moreover, because they are so visible and gasoline is purchased so frequently, gasoline prices have a major impact on the perception of prices. Constantly seeing prices at the pump creep ever higher will often create a perception of broader inflation—and, of course, higher gasoline prices are likely to eventually have an impact on other prices as transportation costs increase. So, it is particularly important that gasoline price changes be measured accurately and reliably. Fortunately, gasoline is one of the few consumer goods for which there are many sources of price data. In fact, the ease of price collection makes it feasible for other government agencies and even private sources to create reliable measures. On the government side, the Energy Information Administration (EIA) publishes extensive gasoline price data. Among private sources are the American Automobile Association, the Oil Price Information Service, and the Lundberg Survey. Furthermore, gasoline is one of the few nonfood items for which the Bureau of Labor Statistics (BLS) publishes an average price series as well as an index; the fact that gasoline is a relatively homogenous product makes meaningful average price data possible. This article examines three measures of gasoline prices: the BLS Consumer Price Index for All Urban Consumers (CPI-U) U.S. city average for all types of gasoline, the BLS CPI average price series for all types of gasoline, and the EIA Weekly Retail Gasoline and Diesel Prices for all grades of gasoline. The purpose of the article is to identify how these measures have behaved over the 10-year period from December 2002 to December 2012

Net Effects of Gasoline Price Changes on Transit Ridership in U.S. Urban Areas, MTI Report 12-19

Using panel data of transit ridership and gasoline prices for ten selected U.S. urbanized areas over the time period of 2002 to 2011, this study analyzes the effect of gasoline prices on ridership of the four main transit modes—bus, light rail, heavy rail, and commuter rail—as well as their aggregate ridership. Improving upon past studies on the subject, this study accounts for endogeneity between the supply of services and ridership, and controls for a comprehensive list of factors that may potentially influence transit ridership. This study also examines short- and long-term effects and non-constant effects at different gasoline prices. The analysis found varying effects, depending on transit modes and other conditions. Strong evidence was found for positive short-term effects only for bus and the aggregate: a 0.61-0.62 percent ridership increase in response to a 10 percent increase in current gasoline prices (elasticity of 0.061 to 0.062). The long-term effects of gasoline prices, on the other hand, was significant for all modes and indicated a total ridership increase ranging from 0.84 percent for bus to 1.16 for light rail, with commuter rail, heavy rail, and the aggregate transit in response to a 10 percent increase in gasoline prices. The effects at the higher gasoline price level of over $3 per gallon were found to be more substantial, with a ridership increase of 1.67 percent for bus, 2.05 percent for commuter rail, and 1.80 percent for the aggregate for the same level of gasoline price changes. Light rail shows even a higher rate of increase of 9.34 percent for gasoline prices over$4. In addition, a positive threshold boost effect at the $3 mark of gasoline prices was found for commuter and heavy rails, resulting in a substantially higher rate of ridership increase. The results of this study suggest that transit agencies should prepare for a potential increase in ridership during peak periods that can be generated by substantial gasoline price increases over$3 per gallon for bus and commuter rail modes, and over $4 per gallon for light rail, in order to accommodate higher transit travel needs of the public through pricing strategies, general financing, capacity management, and operations planning of transit services

Don't Increase Federal Gasoline Taxes - Abolish Them

Many experts believe that gasoline taxes should be increased for a variety of reasons. Their arguments are unpersuasive. Oil is not disappearing, and when it becomes more expensive, market agents will substitute away from gasoline to save money. The link between oil price shocks and recessions, although real in the 1970s, has been much more benign since 1985 because of the termination of price controls. Market actors properly account for energy costs in their purchasing decisions absent government intervention. Pollution taxes, congestion fees, and automobile insurance premiums more closely related to vehicle miles traveled are better remedies for the externalities associated with automobile travel than a simple fuel tax. Gasoline consumption does not necessarily distort American foreign policy, impose military commitments, or empower Islamic terrorist organizations. State and federal gasoline taxes should be abolished. Local governments should tax gasoline only to the extent necessary to pay for roads when user charges are not feasible. If government feels compelled to more aggressively regulate vehicle tailpipe emissions or access to public roadways, pollution taxes and road user fees are better means of doing so than fuel taxes. Regardless, perfectly internalizing motor vehicle externalities would likely make the economy less efficient -- not more -- by inducing motorists into even more (economically) inefficient mass transit use. The arguments advanced against increasing gasoline taxes are applicable to the broader discussion about America's reliance on oil generally. The case for policies designed to discourage oil consumption is nearly as threadbare as the case for increasing the gasoline tax -- and for largely the same reasons

Asymmetric adjustment of retail gasoline prices in turkey to world crude oil price changes: the role of taxes

We empirically investigate the impact of shocks to world crude oil prices on retail gasoline prices in Turkey during the 1991-2007 period. Using a Structural-VAR methodology and monthly frequency data, we report that Turkish retail gasoline prices respond significantly to increasing world crude oil prices, but not to decreases. During the estimation period, 70 to 80% of the retail gasoline price was attributable to taxes which were subject to frequent changes by the council of ministers. Although historical data on gasoline taxes is not publicly available, based on the importance of taxes on gasoline price formation in Turkey, we argue that the source of asymmetry is mainly attributable to government price setting policy choice for gasoline. Based on the observed asymmetry from empirical analysis, we further argue that rather than smoothing the impact of volatility in world crude oil prices on Turkish retail gasoline prices, the Turkish fiscal authorities attempted to maximize tax revenue from gasoline.Retail gasoline prices, Rockets and feathers hypothesis, Emerging markets, Fiscal policy, SVAR, Retail diesel oil prices

Demand for Gasoline: Effects of a Durable Good

This paper estimates empirical demand functions for premium gasoline. Specifically, it determines the effectiveness of policies designed to conserve gasoline by considering the effects of changes in gasoline prices on the demand for premium gasoline and by accounting for the differential effect of these changes on the size and composition of the existing stock of automobiles. Regression estimate is conducted.People’s Car Program, automobile sector

Gasoline Prices and Their Relationship to Drunk-Driving Crashes

his study investigates the relationship between changing gasoline prices and drunk-driving crashes. Specifically, we examine the effects of gasoline prices on drunk-driving crashes in Mississippi by age, gender, and race from 2004Ð2008, a period experiencing great fluctuation in gasoline prices. An exploratory visualization by graphs shows that higher gasoline prices are generally associated with fewer drunk-driving crashes. Higher gasoline prices depress drunk- driving crashes among younger and older drivers, among male and female drivers, and among white, black, and Hispanic drivers. The statistical results suggest that higher gasoline prices lead to lower drunk-driving crashes for female and black drivers. However, alcohol consumption is a better predictor of drunk-driving crashes, especially for male, white, and older drivers.Drunk-driving crashes, gasoline prices, alcohol consumption, Mississippi

Demand for Gasoline: Effects of a Durable Good

This paper estimates empirical demand functions for premium gasoline. Specifically, it determines the effectiveness of policies designed to conserve gasoline by considering the effects of changes in gasoline prices on the demand for premium gasoline and by accounting for the differential effect of these changes on the size and composition of the existing stock of automobiles. Regression estimate is conducted.People’s Car Program, automobile sector

Gasoline Prices: Cyclical Trends and Market Developments

Gasoline prices experience volatility often credited to fluctuations in the crude oil market, but gasoline is subject to its own supply and demand pressures. Cyclical trends such as seasonal changes in refining costs, production adjustments, and changes in demand contribute to gasoline price movements over a typical year. Recently, however, market developments not influenced by seasonal fluctuations have affected prices. From 2010 to 2014, increased access to cost-advantaged domestic sources of crude oil has expanded domestic gasoline production, and evolving consumption patterns in the United States and abroad have altered both import and export demand. Between January 2005 and September 2008, the producer price index for gasoline trended generally higher. (See chart 1.) The onset of the Great Recession pressured producer prices lower in the fourth quarter of 2008, a 67.8-percent drop, before prices started to rebound in early 2009. By mid-2011, prices reached prerecession levels and remained in a tight range before dropping more than 50 percent in the latter half of 2014 and early 2015. This Beyond the Numbers article examines the many factors that contributed to shifting producer gasoline prices from 2005 through 2014

Gas generators produce hydrogen-rich fuel

Resulting fuel, which is produced from gasoline and water, can be burned by gasoline engines with significantly reduced pollution and improved fuel economy

Air pollution and unleaded gasoline in Mexico City

Using a spline regression model and a monthly time series from January 1989 to December 2004 for Mexico City, we test for changes in the time trend for air pollution that coincide with the introduction of a new and relatively expensive unleaded gasoline in September 1990. At this time, new cars were required to have catalytic converters and leaded gasoline was significantly cheaper than unleaded gasoline. The price difference provided an incentive to use leaded gasoline in automobiles that were not suited to its use, thereby increasing emissions. We find that there was a statistically significant and adverse change in the pollution time trend after September 1990 that persisted until leaded gasoline was eliminated from the Mexico City market eight years later. The use of leaded gasoline in new cars is a possible explanation for this result.