¶ … gasoline significantly affects consumer spending decisions both directly and indirectly. Some of the direct effects are those relating to their choices to adopt behaviors that allow them to minimize or at least to reduce unnecessary uses of their automobiles. Consumers typically reduce their recreational uses of their vehicles, they may use public transportation instead of driving to work, and they may make entirely different vacation plans to avoid the additional expenses of gasoline. Those who cannot substitute public transportation for driving their personal vehicles typically carpool much more than they do when gas prices are lower; they may even change their driving habits, such as by slowing down to conserve fuel. In some respects, consumers may also change their spending habits in ways that do not seem related, at least directly, to gasoline prices despite the fact that they are.
For example, because higher gasoline prices always increase the overhead costs of interstate shipping, one of the inevitable effects is an increase in prices of some consumer goods, especially perishable foods that cannot be shipped less frequently to save money. This shows up as an increase in the price of many foods in the supermarket. I have periodically changed my food shopping habits to eliminate or reduce my purchases of certain items, such as fresh apples and some vegetables, based on their increasing price caused by higher gasoline prices. I also use public transportation much more than I used to and I try to carpool to share expenses whenever I drive.
Sources Consulted
Mutikani, L. "Gasoline prices erode spending, incomes." Reuters, May 27, 2011.
Retrieved from:
http://www.reuters.com/article/2011/05/27/us-usa-economy-
idUSTRE7492P720110527
Waters, J. "Gas prices still choke consumer spending: Despite lower prices, consumers tighten belts -- even for vacation." The Wall Street Journal, May 24, 2011.
Retrieved from:
http://www.marketwatch.com/story/gas-prices-still-choke-consumer-spending-
