Why gas prices affect how people see the economy

There are few people more sensitive to gas prices in New York City than taxi drivers. Rouf Kadr parked at a pump at a BP gas station near La Guardia Airport to fill up his yellow cab before his shift.

“I fill the gas every day, almost,” he said. “The full [tank] was like $35. Now, it’s $51.”

Kadr tracks gas prices and said this station usually has the best deal. A gallon of unleaded here today is $3.30. He opened Google Maps on his phone to compare stations nearby.

“You want to see the disaster?” he said, pointing at the screen. “Look now: $3.40, $3.36, $3.60, $3.50, $3.80.”

As the war with Iran continues and gas prices rise, Americans are feeling the pain at the pump. In reality, oil prices are most greatly affected by OPEC, inventory, and geopolitics. But according to the National Association of Convenience Stores, 70% of consumers say gas prices affect their view of the economy.

One reason is likely the way gas prices are displayed, on huge, neon signs by the side of the highway. Plus, there’s the screen on the actual pump.

“You have to stand there and watch these numbers inflate and magnify in front of you and really feel it, you know, the money flying out of your possession,” said Scott Rick, a marketing professor at the University of Michigan. “It’s very visceral.”

There’s also just no way for companies to hide a rising price. Shell and Exxon can’t make gas seem cheaper the way, say, a potato chip maker can by putting fewer chips in the bag. 

“I can’t sell you 95% of a gallon and keep the sticker price the same,” said Rick.

Sure, consumers can reduce their reliance on gasoline by going electric or getting a smaller car. They could also try to drive less. But that’s not as simple as other budgeting trade-offs, like buying chicken thighs instead of chicken breasts. When gas prices go up, people feel a bit powerless.

“You know you can play around on the margins, but we still have to do the things we need to do,” Rick said.

One non-negotiable is commuting to work. And Americans are increasingly living farther away from their jobs.

“And so even a small increase in gas prices can be very expensive if you have a home where people are driving that much every day,” said Peter Norton, author of “Fighting Traffic: The Dawn of the Motor Age in the American City.”

Not only have commutes gotten longer, people are driving bigger cars. Americans like SUVs and pickup trucks.

“They’re considered shockingly big by world standards,” said Norton. “In fact, a lot of the cars that we drive here are too big to be legally drivable on the roads of much of the rest of the world. And this appears to have something to do with people’s need to express themselves or say something.”

Americans invented the drive-in and the drive-thru. Musicians write songs about pickup trucks and corvettes. There is even a trend where Jeep owners leave little rubber ducks on other people’s Jeeps as a sign of mutual appreciation.

“Americans have a long and well-known tradition of loving the road trip, of loving the road adventure, of loving getting to someplace new, getting away,” said Norton. “Sometimes this is called the American love affair with the automobile.”

Driving is freedom — open road, windows down, music up, and wind in your hair. At least when gas prices are low. When they’re high, driving can feel like a burden, especially when it’s your job.

“It’s going to touch me directly, you know,” said Kadr, who needs to see prices go back under $3 a gallon to feel good about the economy again. “The prices going up, I am going down.”