Sunday, June 22, 2008

Gas: Dollars/Gallon or Gallons/Dollar?

It occurred to me today that even though gas is priced in dollars/gallon, I've never purchased it that way. I either pay with a credit card and fill the tank up, or if using cash I pay for an even dollar amount, like 20 bucks (or more often this summer, 40 bucks). I have never bought exactly one gallon of gasoline, though in high school I did once buy exactly one dollar of gasoline. This being the case, why aren't prices listed in gallons/dollar?

Displaying prices in this form would emphasise Bryan Caplan's point that the instability of the dollar is a significant factor in the current high price of gasoline. The national discussion would change from concern about high gas prices to how little gas each dollar purchases.

3 comments:

Ravi said...

Wow, I've never thought of it that way before, but it makes a lot more sense.

mknox said...

These days, I go one step further- I tend to think how many miles of travel per dollar. (With the car I drive, that's about 4 miles per dollar.) When I go to the gas station, I am momentarily upset by not only my dollars' limited purchasing power, but also my car's limited fuel economy. So, this summer I've decided to ride my bike more. Maybe I've started to acquire those crazy/hippie/ignorant Berkeley ideas people warned me about and I've failed to rationally address the main idea this blog is getting at. But, riding my bike really does make my dollar travel farther and my gallon last longer.

Josh Knox said...

Well if you're biking, you ought to compute your fuel economy in calories/mile.

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty