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Pain from increased gas prices is mostly mental

A gas pump in Berkeley, Calif.

Steve Chiotakis: This week, we could see average gas prices across the country top $4.00 a gallon. A full dollar more than just six months ago. Sure sounds like a big deal. And to most people it is. But how much do those incremental increases really cost you?

Marketplace's Jennifer Collins took a ride to find out.


Jennifer Collins: If you're upset about gas prices in your part of the country, welcome to Los Angeles.

Collins: OK. I just filled up my gas tank. It's $4.29 a gallon. My total comes to $44.25.

Ugh!

John Gourville is a marketing professor at Harvard Business School.

John Gourville: You know, the idea of spending $40, $50, $60 at the pump seems outrageous.

But let's do the numbers: The average driver fills up about once a week. So every time the price of a gallon of gas goes up a dollar, it costs an extra $10 to $15 to fill the tank.

Gourville: So I think the actual increase is less than people's response to that increase. And I think it's because with gas prices, it's right in your face.

He says the huge signs at the gas stations keep us thinking about gas all the time -- well, most of us anyway. Michelle Saint-Germain is a professor at Cal State Long Beach. She's been driving 300 to 400 miles a week for 16 years. She stopped looking at gas prices years ago.

Michelle Saint-Germain: I'm gonna buy it anyway. I mean, I suppose if I drove up and it said $50 a gallon, I might be really outraged but it just goes up a little bit, little bit, little bit and I just don't even notice it.

Saint-Germain's secretary Kathy Allan put the price of gas in practical terms.

Kathy Allan: I guess it's you know, two days of lunch.

But has she started brown-bagging it?

Allan: No. Sorry.

Professor Soren Anderson at Michigan State University has an explanation for that.

Soren Anderson: If the reason the price is getting high is because people are doing better and wanting to buy more oil.

In other words, the economy is improving...

Anderson: Then, they might not feel like they're worse off.

But for people who aren't feeling the recovery, the increase can sting. And some do cut back their driving -- creating what may be the very few benefits of higher gas prices.

Saint-Germain: Right. It's a lot easier to find a parking space.

That's Saint-Germain as she pulls into a front-row spot.

I'm Jennifer Collins for Marketplace.

About the author

Jennifer Collins is a reporter for the Marketplace portfolio of programs. She is based in Los Angeles, where she covers media, retail, the entertainment industry and the West Coast.
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I find this article offensive! Come live in my "mental" world for a month, then let's look at real news reporting! It's one thing to report a story as information, and it's another to report bias gathered from a populous that doesn't feel it! I live on fixed income and feel every penny, especially when other goods and services are increasing in costs just as much.

Did Jennifer formerly write for The Onion?

whaahaaahaa.... What did you expect readers.... hahahhaa..:) IT'S MOSTLY MENTAL !!!! hahahha.... I subscribe here because this is my comic book!

I can't believe you ran such a glib story about such an important issues for most Americans. No worries about gas prices? Tell that to those of us in rural areas who HAVE to drive to get anywhere. My husband and I are trying to figure how we're going to make ends meet and still get to work every day. The rising gas prices has had a huge impact on our family budget.

What a bunch of arrogant jerks. That was a terrible story - what was the point of it? "Look at these three educators! They're doing fine! Fifty bucks a gallon? Who cares?!?!" Ffffftt.

Seriously? Is this written tongue in cheek? I pulled this widget down on my google home page last week because I thought I would glean insightful and thought provoking articles with information I could use to help my recovery from the loss of two businesses in 2008. HBS what? Jennifer please... I implore you to get some economics classes going before you write about commodities pricing again. In the meantime do get in some oil futures and exchange the profits for Chinese Yuan. Between gas and diaper increases America is doomed!

Look, I understand that your morning reports are supposed to be glib and light. But this report was incredibly irritating.

"Sure sounds like a big deal. And to most people it is. But how much do those incremental increases really cost you?"

The article then interviews three college professors. The first is a marketing professor at Harvard who provides spurious data about how little the cost affects drivers.

Then, a professor at Cal State Long Beach says SHE can afford the difference in price, and doesn't bat an eye.

Then, a professor from Michigan State University tells us that gas is going up because the economy is getting better, so it's all good.

It's all well and good that these three college and university professors can afford an extra $10 to $15 a week for gas.

"Sure sounds like a big deal. And to most people it is. But how much do those incremental increases really cost you?"

How is it that "to most people it is" is given such short shrift, as the piece devolves into how much it costs "you" (three college professors)..?

My economy is not improving. My household income is the same now as it was in 2000 (went up a little, came down a lot, went back up to 2000 level). I purchase roughly a thousand gallons of gasoline per year. A thousand dollars? Yeah, that's a lot of money to me. As I'm already brown-bagging it, I don't really have a lot to cut.

If only I were a college professor.

If only...

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