Wednesday, May 07, 2008

Gas Price Stress

I haven't spent much time talking about gas prices on this blog, mostly because I'm fairly tired of hearing about them 24/7. But Tuesday I came across an article on which I'd like to comment:

UPI: "Gas price stress lowers work productivity"

Some quick points:

Wayne Hochwarter of the Florida State University's College of Business surveyed more than 800 full-time employees this spring when gas prices hovered at about $3.50 per gallon and found employees are simply unable to detach themselves from the stress caused by escalating gas prices.

The people surveyed work in a wide range of occupations, primarily in the southeastern United States, and drive personal vehicles to work with an average commute of 15 miles each way.

"People concerned with the effects of gas prices were significantly less attentive on the job, less excited about going to work, less passionate and conscientious and more tense," Hochwarter says in a statement. "These people also reported more 'blues' on the job."

A few more stats from the article:

[Due to rising fuel costs] 52 percent [of respondents] have reconsidered taking vacations.

— 45 percent have had to cut back on debt-reduction payments, such as credit card payments.

— Nearly 30 percent considered the consequences of going without basics, including food, clothing and medicine.

— 45 percent report the escalating gas prices have "caused them to fall behind financially."

What this article seems to tell us — aside from the fact that this country has too many researchers — is that lots of households apparently have a tough time coping when any one expense increases $125 per month. Not a surprise, of course, but a telling point nonetheless. The paycheck-to-paycheck crowd is alive and well. Or alive and suffering, as the case may be.

Where'd I get that $125 number?

Easy. I was just playin' with Excel:

Cooking with gas prices

Using the survey's 30-mile-per-commute-per-day average, and factoring for some other assumptions (2 drivers per household; 17mpg average from vehicles; and so on) I estimated that having gas prices at $3.50 per gallon (where they are in my town) costs our Average Survey Family roughly $125 per month more than does $2 per gallon gas.

If you'd like to see the (very basic) spreadsheet I used, and perhaps play with the numbers a bit, you can get it here:

Spreadsheet: Cooking with Gas Prices

I enjoyed changing the variables (like commute distance and mpg) and watching the effect these changes had on monthly fuel costs. Makes me glad my household owns two four-cylinder, decent-mileage vehicles (Nissan truck and Honda Accord). However, it also makes me wish I had my '95 Accord back. That little scooter had a five-speed standard transmission, and got FANTASTIC mileage (upper 20s to lower 30s mpg) all around.

Bothered By Higher Fuel Prices?

Am I bothered by higher fuel prices? At this point, not so much. Certainly it doesn't interfere with my workday — except for that part about having to listen to coworkers b*#&h and moan about $80/tank fill-ups.

Now, I don't like spending $40 or $45 to fill up our tanks, but the increased fuel cost hasn't destroyed my budget. In fact, at the end of the month, I don't notice it too much at all. My commute is less than 20 miles per day, and my wife's (stay-at-home mom) driving is largely "to-school-and-back" or "to-store-and-back." We're terribly lucky in this regard.

If you're a paycheck-to-paycheck family, however, whose monthly cash flow is already redlining, then current fuel prices could be a zinger. Throw higher food costs on top of that, and yes, you're talking significant stress.

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— Posted by Michael @ 8:38 AM


Ah, the good ol' days when gas was only $2/gallon.

Your facts, math, and fancy shmancy spreadsheets just show how ELITE and OUT OF TOUCH you are with the common people. Next thing you know, you'll be telling us that a suspension of the federal gas tax is a stupid, pointless idea. Why do you love oil companies and hate Americans so much?


Yeah, and now all the big truck/SUV suckers are weeping and wailing about not only gas prices but the plunging values of their Bloatzillas and Barge-o-matics.

Trading an SUV for a huge loss and rolling into a Versa isn't going to save you a damned dime but too many people can only look a day ahead, not years, so all they think about is the fill-up cost.

oh, and (temporary) suspension of the gas tax IS a stupid, pointless idea.


I read this blog often, if anonymously. It almost always contains, good, thoughtful stuff. I'm not sure what the first commenter is whining about.

You don't need to be elite or out of touch to teach yourself how to think ahead or run some basic calculations. Spreadsheets help do this, but the same calculations can be done with pen and paper!

And yes, suspending the gas tax is a stupid idea. And if you were such a patriot, you would leave your big SUV/truck at home and travel around in a smaller vehicle, if only to preserve the environment of this beautiful country if nothing else. I have plenty of family that own such vehicles, but they own them because they need them to get around the areas where they live.

What you can't do is have your cake and eat it (whine about it?) too! There's nothing anti-American about saying that. Want to drive an expensive-to-run auto? Believe in free markets? Okay, then -- pay the market price! That's what individual choice (and responsibility) is all about!

By way of disclaimer: I'm not suggesting I'm perfect by any stretch of the imagination, and I've learnt a lot from this and other PF blogs. Sometimes it hurts to think and learn things about your own habits! On other hand, it doesn't necessarily make the writer elitist, anti-American, or any other label you care to sling at people.

Anonymous Anonymous
, at 2:41 PM, May 07, 2008  

I'm loving this $4 per gallon fuel.

It really seems like there are less cars on the road. I really don't think it's the price of gas. you don't see anyone driving slower that's for sure. I just took a 400 mile trip the other day and did the speed limit, I was passed like I was standing still most of the time.

Oh and BTW I rode my motorcycle and averaged 54 mpg on that trip. Yee Haw!!

Anonymous Anonymous
, at 10:04 AM, May 08, 2008  

"Your facts, math, and fancy shmancy spreadsheets just show how ELITE and OUT OF TOUCH you are with the common people."

You certainly have a low opinion of the average American if you think using math and facts put someone "out of touch" with "the common people".


Ah, sorry, I forgot to add snark tags to my comment. Of course, this is one of my favorite money blogs, and I'm a huge fan of Michael's; his writings are what got me in financial shape. I guess I should leave subtle nods to current political stories out of my blog comments!

No harm intended.


This is really great stuff I love reading this blog
Thank you very much


I never really put the two of these together but it does make sense.

Gas is just one of those expenses you have to budget for. I always high ball it so when the gas prices hit the pump, I'm not surprised.


I am one of those people who complains about gas prices -- perhaps it's because I live in LA and commute 20 miles to work each way in stop-and-go traffic. Makes a person cranky after a while. And while I don't live paycheck to paycheck, it would be nice to put more money in the bank, rather than my gas tank.

But I had to laugh at one of the comments that mentioned how the roads were less crowded -- I'm keeping my fingers crossed for that one -- I'll pay the 4 dollars a gallon over here if it means my commute time is cut in half.


Matt, if it's any consolation, I totally "heard" your sarcasm. I have the same problem with people though. :)


Oh, and I know of one person who's entitled to complain about gas. She had to leave her husband a few years ago because he kept hitting her and emotionally abusing her, and she's left raising their three kids with hardly any support money from him. She lives in a semi-rural area and commutes into the city; if she actually moved there, her expenses would increase well beyond her ability to meet them with income. And she's a degreed professional. She is also learning a lot about frugal living and was already inclined to be less of a spender in the first place. So... she's making it. Barely.

It makes me angry every time I see some random guy complaining about the "luxury" his support payments confer on his kids' custodial mother, like it just puts him out to do his part when he's not raising them, and then I turn around and watch her struggling.


Two comments:
1. If oil is getting scarce than gas SHOULD be increasing in price. It (price of fuel) the only thing that actually gets people to change their behavior. (such as what type of vehicle they buy). Yes, suspension of the federal gas tax IS a stupid, pointless idea.
2. Michael, I am surprised that you consider your '95 Honda Accord "scooter" as getting fantastic mileage (high 20's to low 30's). Just finished a tank at 29 mpg on my '07 Taurus (no exaggeration. Average is about 26 mpg). Not bad for a decent sized American car.

Anonymous Daytona084
, at 9:24 PM, June 01, 2008  
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