There's this thing called "gas", which contrary to popular belief, is not the stuff that comes out of you when you fart, but rather is this thing that people use to power their "cars."
Bieng a city resident I have no need for "cars" and therefore am unaffected by the apparent price hikes of this "gas" in recent weeks. It is with mild amusement and no small amount of hubris that I go about my commute unaware of the pain that this "gas" is causing for people's "cars." But Jane Galt has some good observations about why people are so upset at the price of this precious fluid:
My thoughts:
1) Most Americans buy gas at least once a week
2) They buy a lot of it
3) They buy it by itself--if the price of milk or orange juice rises, it gets lost in the overall grocery bill, which is still falling in real terms.
4) The price is visible and because demand is almost completely inelastic, little effort is made at price discrimination--there are no coupons for cut price gas.
5) There is relatively little variation in gas prices compared to, say, generic food/drugs vs. name brands.
6) Gas is heavily implicated in other consumption. When the price of milk rises, you stop drinking milk and start drinking calcium-fortified OJ (or vice versa). When the price of gas rises, you stop going to the movies and start watching the science channel.
7) There are very few good substitutes for gasoline consumption.
8) It is relatively difficult to cut back on gasoline consumption, because commutes and things like grocery shopping make up so much of the total, and people only purchase new cars once every few years, if that.
In short, people have to buy it; they have to buy large amounts of it frequently; it's very difficult and painful to economize on; and the cost is highly visible. That's what makes it different from groceries or furniture. Or anyway, that's my guess.
Never mind, of course, that people have brought this problem upon themselves by refusing to live in places with adequate public transportation.
More gaseous thoughts at the invaluable Coyote Blog.
And, for the perspective of a real economist, check out the ElectEcon.
Personally, I just think people are morons, and, as morons are wont to do, they see that they are paying more in absolute terms than they used to pay for the same thing, and, therefore, politicians see an opportunity to curry favor. The consequence is that all coherence and rational thought evaporates like, well, gas. And ignorance persists.
This is all a function, in part, of statistical illiteracy (i.e., understanding the difference between absolute and relative pricing). For some of my comments on the pervasiveness of statistical innumeracy, see my comments at Althouse's blog post about self-selected (non-random) online surveys. Same innumerate principle applies to gaseous matters.
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