Just how expensive is gas anyway?

One of my frustrations when people freak out about gas prices is that historical comparisons almost always seem to be in nominal dollars.  But in inflation-adjusted dollars, gas is cheap!  I was complaining about this to an Economist friend, who sent me this great post.  Not only does it place gas prices in real dollars, there’s lots of other interesting ways to think about gas prices that show just how affordable it is.  Honestly, too affordable– unpriced externalities, baby!  Anyway, here’s gas in real dollars:

But, also, some other cool ways to think about gas prices:

Anyway, my economist friend and I were discussing the political impact of gas prices and he hypothesized that the negative effects are likely more from rapid increase in nominal price, more than the actual price.  Interesting idea that I suspect is substantially true.  

About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

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