Gasoline Alley


It’s amazing how much time news stations can spend on showing people complaining about gas prices.

For obvious reasons, I was thinking the same thing last night. But then, in my usual wonkish way, I got curious about the subject.

It turns out that the average household uses about 1100 gallons of gasoline per year and has an average income of about $44,000. Take out 20% for taxes and that’s a disposable income of $35,000.

So at two bucks a gallon that means the average household spends 6% of its disposable income on gasoline. At three bucks a gallon it’s more like 10%. And that’s only the average.

If your income is higher than average or your driving habits are lower than average, you’ll spend less. Marian and I qualify on both counts, and my guess is that we don’t spend more than 2% of our income on gasoline. Higher gasoline prices don’t really affect us that much.

At the other end, though, are the people who make less than average and drive more than average. They probably spend 15-20% of their incomes on gasoline. That’s a lot.

So there you have it. There’s a substantial segment of the population that spends a very big chunk of their income on gasoline, and in the past 12 months they’ve seen gasoline prices increase by 50% ? and that’s at a time when household income has been decreasing for five years running and household debt is already sky high. They’re probably pretty pissed that that whole Iraq business didn’t work out quite the way it was supposed to.