What share of your income do you spend on fuel?

[Sun_Worshiper]

Btw, the reason people focus on energy/fuel costs is that they affect the costs of nearly all other goods.

[secundem_artem]

I average about 2 tankfulls a month at $45 each.  So about $1000 a year.  I get about 23 mpg around town and well over 30 on the highway.  The price of gas is the least of my problems.  Given Americans' propensity to drive SUVs and pickup trucks the size of aircraft carriers (and their touching belief that somehow the president sets the price of gas) no wonder this is such a topic of discussion. 

[Cheerful]

However, I don't like using gas purchases as a measure of the cost of driving. I like to use the IRS measure of approx. 50 cents per mile as a better measure of the cost of driving my vehicle, which supposedly accounts for the total cost of car ownership spread out over time (maintenance, repairs, taxes, insurance, the purchase price of an average car spread out over the typical life span of the typical car in good condition, and of course gas). Using that, it costs me almost 9% of my pre-tax income to drive my car.

Yes, driving a car costs much more than just gas.  If you live in an area with poor roads/many potholes, that also adds to the average cost.  The 2022 federal rate is 58.5 cents per mile, up 2.5 cents from 2021.

[lightning]

However, I don't like using gas purchases as a measure of the cost of driving. I like to use the IRS measure of approx. 50 cents per mile as a better measure of the cost of driving my vehicle, which supposedly accounts for the total cost of car ownership spread out over time (maintenance, repairs, taxes, insurance, the purchase price of an average car spread out over the typical life span of the typical car in good condition, and of course gas). Using that, it costs me almost 9% of my pre-tax income to drive my car.

Yes, driving a car costs much more than just gas.  If you live in an area with poor roads/many potholes, that also adds to the average cost.  The 2022 federal rate is 58.5 cents per mile, up 2.5 cents from 2021.

Yes, 58.5 cents per mile, but I can't calculate driving costs in my head without rounding it down to 50 cents a mile. It's all very approximate, in either case. It's really easy to calculate the cost of a round-trip road trip when I use the rate of 50 cents to a mile.

[dismalist]

I was driving [sorry :-)] at the effect of the gasoline price on the cost of living, not the cost of driving.

Most posters are at or under the national average of 2.5% [2019] of income spent on gas. Two per cent looks like a common number among posters. Thus, if the price of gasoline goes up by 100%, i.e. it doubles, their cost of living goes up by at most 2.5% cent. [Less because we drive less.]

I suppose that's big enough to be noticeable, and as the price fluctuates, to be newsworthy.

[Sun_Worshiper]

I was driving [sorry :-)] at the effect of the gasoline price on the cost of living, not the cost of driving.

Most posters are at or under the national average of 2.5% [2019] of income spent on gas. Two per cent looks like a common number among posters. Thus, if the price of gasoline goes up by 100%, i.e. it doubles, their cost of living goes up by at most 2.5% cent. [Less because we drive less.]

I suppose that's big enough to be noticeable, and as the price fluctuates, to be newsworthy.

Not really, since the cost of fuel affects the costs of lots of other goods.

[dismalist]

I was driving [sorry :-)] at the effect of the gasoline price on the cost of living, not the cost of driving.

Most posters are at or under the national average of 2.5% [2019] of income spent on gas. Two per cent looks like a common number among posters. Thus, if the price of gasoline goes up by 100%, i.e. it doubles, their cost of living goes up by at most 2.5% cent. [Less because we drive less.]

I suppose that's big enough to be noticeable, and as the price fluctuates, to be newsworthy.

Not really, since the cost of fuel affects the costs of lots of other goods.

Yes, and to different degrees, no less. But depending on macro conditions, many prices could even fall while the gasoline price and other prices rise.  So, one price at a time, or ceteris paribus, to cut through the complications. 

[jimbogumbo]

I was driving [sorry :-)] at the effect of the gasoline price on the cost of living, not the cost of driving.

Most posters are at or under the national average of 2.5% [2019] of income spent on gas. Two per cent looks like a common number among posters. Thus, if the price of gasoline goes up by 100%, i.e. it doubles, their cost of living goes up by at most 2.5% cent. [Less because we drive less.]

I suppose that's big enough to be noticeable, and as the price fluctuates, to be newsworthy.

Not really, since the cost of fuel affects the costs of lots of other goods.

Yes, and to different degrees, no less. But depending on macro conditions, many prices could even fall while the gasoline price and other prices rise.  So, one price at a time, or ceteris paribus, to cut through the complications.

Agriculture is one of those fields, yes? So higher fuel rates really put a hurt on lower income workers who drive. I'm assuming diesel and fuel oil prices are highly correlated to gasoline prices most of the time.

Is that incorrect?

[Sun_Worshiper]

I was driving [sorry :-)] at the effect of the gasoline price on the cost of living, not the cost of driving.

Most posters are at or under the national average of 2.5% [2019] of income spent on gas. Two per cent looks like a common number among posters. Thus, if the price of gasoline goes up by 100%, i.e. it doubles, their cost of living goes up by at most 2.5% cent. [Less because we drive less.]

I suppose that's big enough to be noticeable, and as the price fluctuates, to be newsworthy.

Not really, since the cost of fuel affects the costs of lots of other goods.

Yes, and to different degrees, no less. But depending on macro conditions, many prices could even fall while the gasoline price and other prices rise.  So, one price at a time, or ceteris paribus, to cut through the complications.

The point is that you can't disentangle fuel from the price of goods, which appears to be the point of this thread.

[dismalist]

I was driving [sorry :-)] at the effect of the gasoline price on the cost of living, not the cost of driving.

Most posters are at or under the national average of 2.5% [2019] of income spent on gas. Two per cent looks like a common number among posters. Thus, if the price of gasoline goes up by 100%, i.e. it doubles, their cost of living goes up by at most 2.5% cent. [Less because we drive less.]

I suppose that's big enough to be noticeable, and as the price fluctuates, to be newsworthy.

Not really, since the cost of fuel affects the costs of lots of other goods.

Yes, and to different degrees, no less. But depending on macro conditions, many prices could even fall while the gasoline price and other prices rise.  So, one price at a time, or ceteris paribus, to cut through the complications.

The point is that you can't disentangle fuel from the price of goods, which appears to be the point of this thread.

But I just did! :-)

[Sun_Worshiper]

I was driving [sorry :-)] at the effect of the gasoline price on the cost of living, not the cost of driving.

Most posters are at or under the national average of 2.5% [2019] of income spent on gas. Two per cent looks like a common number among posters. Thus, if the price of gasoline goes up by 100%, i.e. it doubles, their cost of living goes up by at most 2.5% cent. [Less because we drive less.]

I suppose that's big enough to be noticeable, and as the price fluctuates, to be newsworthy.

Not really, since the cost of fuel affects the costs of lots of other goods.

Yes, and to different degrees, no less. But depending on macro conditions, many prices could even fall while the gasoline price and other prices rise.  So, one price at a time, or ceteris paribus, to cut through the complications.

The point is that you can't disentangle fuel from the price of goods, which appears to be the point of this thread.

But I just did! :-)

You did, but your point is meaningless since fuel prices don't exist in a silo.

[theteacher]

1.34% of my take-home income (after tax).

[dismalist]

I was driving [sorry :-)] at the effect of the gasoline price on the cost of living, not the cost of driving.

Most posters are at or under the national average of 2.5% [2019] of income spent on gas. Two per cent looks like a common number among posters. Thus, if the price of gasoline goes up by 100%, i.e. it doubles, their cost of living goes up by at most 2.5% cent. [Less because we drive less.]

I suppose that's big enough to be noticeable, and as the price fluctuates, to be newsworthy.

Not really, since the cost of fuel affects the costs of lots of other goods.

Yes, and to different degrees, no less. But depending on macro conditions, many prices could even fall while the gasoline price and other prices rise.  So, one price at a time, or ceteris paribus, to cut through the complications.

The point is that you can't disentangle fuel from the price of goods, which appears to be the point of this thread.

But I just did! :-)

You did, but your point is meaningless since fuel prices don't exist in a silo.

All prices hang together.

From the point of view of an individual consumer, who faces given prices, I just showed how a single price change affects welfare. It's nothing more than the arithmetic of budgets, with an afterthought of substitution thrown in.

If one knew how all relative prices change together, one would be welcome to use this information to calculate a new budget. Suppose the gas price rises 100%. Gimme some numbers! :-)

[clean]

There are not a lot of good substitutes for gas (ie demand is inelastic to a good degree).  So when prices go up, it is felt more.  Also, 2% of the budget is not exactly insignificant!  After all, at the limit, there are only 50 items that even COULD be 2% of your budget! 

When other prices increase we can at least TRY to find a substitute, but there is no substitution for gas.  Public transportation is not available in a lot of places!  Also, if you are in an area with no public transportation, then you are probably too far from basic needs to walk or bike reasonably either. 

[apl68]

There are not a lot of good substitutes for gas (ie demand is inelastic to a good degree).  So when prices go up, it is felt more.  Also, 2% of the budget is not exactly insignificant!  After all, at the limit, there are only 50 items that even COULD be 2% of your budget! 

When other prices increase we can at least TRY to find a substitute, but there is no substitution for gas.  Public transportation is not available in a lot of places!  Also, if you are in an area with no public transportation, then you are probably too far from basic needs to walk or bike reasonably either.

And since most of the average person's 100% is already committed at any given time, another 2% is a disproportionately large chunk out of whatever discretionary money they may have.  No question about it--for many people a sudden spike in gas prices would be a serious hit.

I'm another one-percenter, or just slightly over, anyway.  That's an actual figure.  Only a few days ago I did my annual analysis of my spending for the past year.  My gasoline expenses have been running in the one percent or so range for the several years that I've been doing this.  I drive a small car and commute to work on foot or by bicycle.  Natural gas and electricity for my house ran about another four percent or so of income for the year.