Are you suggesting that my cost to have someone wait in line for me to buy gasoline is only the minimum wage rate? Surely there is a cost to the increased risk of allowing a minimum wage worker drive my car.

As a small business owner, I've observed the high turnover rate for low wage workers in parttime jobs – much different from that of fulltime workers. The cost of finding and hiring such a worker to fill my gas tank would have to be repeated several times through the year.

During the time tat a low wage worker is filling my gas tank, what would I use for transportation in case of an emergency?

What am I not getting, Per? Was your post a joke, as it certainly seems to me?

So a quicker way to compute the actual price of gas in the seventies is to add the minimum-wage to the pump price.

Simply adding the minimum wage to the price of a gallon of gas assumes that everyone in the seventies waited an average of one hour every time they bought gas and then bought one gallon of gas. I doubt that anyone has the data required to estimate the cost of queuing meaningfully.

There are probably more filling stations today, more conveniently located where people need to buy gas. This change also affects what people pay to fuel their cars, but I don't know how you'd quantify the effect.

The analysis of increased fuel efficiency is more compelling.

The problem we have now is information overload. I had thousands of hits, but only found a few that had the information I was seeking. Still, it took me no more than a few minutes… a small price for what I've learned at the Cafe!

Best,

Gary

Looks like the take-away is that the average MPG from 1980 to 2007 has increased 40 to 47 percent. You can reverse the math their on the current price of gas, and you get $2.77

Just another way of looking at comparisons over time. I don't think any one of these ways is the magic answer. I once asked a historical actor who goes around in character as Ben Franklin, how much he would pay for a device that would allow him access to information on all kinds of subjects from around the world (I essentially described the iPhone with Wikipedia access). He said he'd give everything he had, because with that he could earn it all many times over.

It's very difficult for people to grasp the value of things over time. Inflation calculators just don't get you there.

Gary, I'm always interested in how to mine the incredible amount of resources that exist out there. Could you tell me how you find things like that table? Were you already aware of it for some other purpose?

http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html

Could you try that link again, I'm interested in reading whatever you found but that link doesn't go anywhere. It looks incomplete.

http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html

http://www.americanrhetoric.com/speeches/jimmycarterundeliveredenergyspeech.htm

you're making my point: the cost of standing in line is real and in fact it equals how much you would have to pay a high-school kid to do that for you. So a quicker way to compute the actual price of gas in the seventies is to add the minimum-wage to the pump price. This would still be lower because we're not counting the transaction costs.

Again the difference is that today there are less (overt) price controls so the current price internalizes most of these other costs.

draw a supply and demand diagram with a price ceiling below the market clearing price. This is the 70s.

That's all well and good, but it tells me nothing quantitatively about the real cost of gasoline in 1979 versus the cost today. If Don wants to challenge comparisons based on a simple CPI adjustment, he needs more than clever rhetoric. The "hour wait" is just a number he's picked out of the air. I'm extremely skeptical that everyone across the U.S. waited an hour for gasoline on the average at any time in the seventies, but everyone is paying roughly $4.00/gallon for gasoline 24/7 today. If Don can make this case, let him make, but he certainly doesn't make it above.

Again, increasing fuel efficiency is also a factor worth considering. We could be paying more per gallon but less per mile, and we could certainly pay less per mile in the future even if the price of gasoline per gallon remains higher. This point seems more compelling, particularly since I was driving in the late 70s and never waited in line for gasoline.

You could hire someone to queue for your and you would still have the market clearing the price for gas.

If you can have tenured professors why can’t you give the small guy a chance for gainful employment?

How much time have you wasted standing waiting in banks and that has not killed you eh?

draw a supply and demand diagram with a price ceiling below the market clearing price. This is the 70s. There was excess demand and prices were not allow to rise (artificially). Now look at the quantity consumed and draw a vertical line. When you meet the ceiling that's the price at the pump then. However, Don keeps on going along this vertical line until he meets the demand curve. Because after all, at this quantity level, people are willing to pay that much (just read the demand curve in reverse). Now this new price is higher than the one at the pump and is also higher than the market price. Part of this price is monetary and part is paid "in nature", e.g. time spent in queues, health hazards of waiting in a car without air-conditioning, etc… The point of the post is that the price at the pump alone is not enough, because the price controls make gasoline scarcer and more expensive (all included).

1974,when Ford was elected

Ford was neither elected president, nor elected vie president.

Thats why I decided to educate myself about economics.

Right, but you're describing one anecdotal experience. I'm paying the roughly $4.00 a gallon now, and so is everyone else in the U.S., everywhere, every day. Even if half the population in the seventies shared your experience once a week, the experience doesn't remotely make up the difference between the CPI adjusted price of gas then and now on the average.

It's a quantitative question, not a political question.

I don't understand why Don's point is a stretch: I sell gasoline for free you just have to wait forever to get it, deal?

It's a stretch, because people didn't wait forever for gasoline as a matter of fact. If Don has some concrete statistics on how long people waited on average across the U.S. at a particular time, that's fine, but anyone can pick a number out of the air and pretend to have proven something. I was only a teenager in the seventies, but I drove throughout '78 and '79, and I never waited in a gas line. I saw them on television, but I never waited myself.

Don purports to address a specific claim. Is gasoline really more expensive today that it was in the late seventies? If he answers "no", that's a quantative proposition requiring a quantitative analysis, not vague handwaving. Vague handwaving is the sort of politic argument he ordinarily detests. There is no sound economic reason to suppose that the real price of gasoline can never exceed its value in the late seventies.