Sensitivity Analysis of Higher Gas Prices

We‘ve constructed the following cheat sheet to give a sense of how higher oil and gas prices will impact the pocketbook of individual consumers and families given various gas prices and average miles driven.   Of course, much depends on the initial conditions of each driver, such as gas mileage per car.    The matrix assumes the national average of 17.4 miles per gallon and a 2010 average gas price of $2.50, which we think is a pretty close approximation.  (click table for better resolution)

The data show that if gas prices continue to rise from here and average $4.00 per gallon in 2011, for example,  the additional annual expenditure on gasoline for a person who drives 50 miles per day (18,000 annual) at 17.4 mile per gallon will total $1,551.72.  Using the same assumptions and with three cars in the family fleet (50 miles is a trip to the grocery market in some parts of the country), we’re talking a real hit to purchasing power.

To calculate the additional monthly expenditure of, say,  a more temporal price spike divide the data point by 12.  (click here if matrix and chart are not observable)

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2 Responses to Sensitivity Analysis of Higher Gas Prices

  1. Pingback: While Washington (and the Fed) Fiddle….. | Global Macro Monitor

  2. bishopscourt says:

    Global Macro Monitor is absolutely no exception…

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