By May 20, 2008

The economics of fuel economy

My daily commute — about sixty miles — plus my entry about the Smart car yesterday led me to thinking about fuel prices and how they impact my bottom line. Gas going to four dollars a gallon doesn’t make a real difference in my commuting. certainly not to the point where I would move closer to work, change jobs, or change vehicles solely for the sake of saving money on gas. So I asked myself, “Self? How much of your daily earnings would you have to spend a day before money spent on commuting forced a lifestyle change?”

Here’s the math. All of my vehicles take premium gas, at $4 a gallon. I am spending less than $11 a day on gas if I drive my Mazda to work. This is my “worst-case” scenario, as the turbocharged four-cylinder battlewagon sucks gas down at 22MPG. If I ride my BMW to work I cut my daily fuel expenditure down to $4.80. A worst, I spend far less than 1% of my daily salary on fuel.

So at what point would I start giving a shit about my commuting fuel expenditures? I am guessing that gas would have to take up 5% of my daily salary to even make a realistic blip on my financial radar. I would complain about the cost of going to work, but the money I make would more than justifies the fuel expense. There just aren’t any equivalent jobs on this side of Richmond.

I think gas would have to equate at LEAST 25% of my daily earnings before I made a significant lifestyle change. I may move closer to work because I feel like I am wasting my time spending 90 to 120 minutes a day in transit. I may buy a more fuel efficient car because I feel like it’s the “right” thing to do. I may change jobs to something closer because I am fed up with my current one. But the cost of daily driving has nothing to do with that decision. And probably won’t unless we run out of gas and it skyrockets to $50 a gallon or more.

At what percentage would gas prices make you change your lifestyle?

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7 Comments on "The economics of fuel economy"

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  1. Configures says:

    Given my mere 4-mile commute at my new job, if gas rose high enough to make me think about moving closer, the world would probably be in flames anyway. However, if it quadrupled, it might make me more likely to plan more trips via rail than by just hopping into my car.

  2. Ed says:

    Gas needs to be more expensive anyways. In the old days, the peasants stayed on the farm or village, where they belong. Now they crowd my transportation systems! Price em out, I say.

  3. fishy says:

    Hm, I’m with you. I haven’t really blinked at the cost of gas yet… Although, the other day I did come to the realization that it cost me $19/day to go to work in my gas guzzling Jeep. Or about $5 if I ride BB.

    I do ride more now just because it’s sunny and warm, but it really hasn’t stopped me from driving my beloved Jeep… with the top down to be the least aerodynamic as possible. :D

    I think it’d have to be about a kajillion dollars before I change my habits.

  4. Rasterbator says:

    $4.80 per gallon consider expensive for me. My country only sell it at $$2.80 per gallon. I just wish gorvenment not to increase the price

  5. Motodisiac says:

    You are simply blessed with great paying job. Imagine you are earning minimal wage (let’s say $50 a day after taxes) and have to take the same commute. Imagine you have an old beater that gets 15mpg on a good day. You have no choice but to commute because you can’t afford moving closer to work. I think there are far more people like this and they are greatly affected by gas priced and high prices in general. Everything has done up lately except the salaries.

  6. drfaulken says:

    Hey Moto!

    I worked retail and food service for the first seven or eight years of my life, so I know what it’s like to live — or attempt to live — on a shitty hourly wage.

    As much as I liked working in some of those jobs, none of them were irreplaceable. I walked from one employer to another during a lunch break and got a different job.

    I don’t argue with you that higher gas prices hurt those with smaller incomes. What I’m trying to say is that other work at the same pay rate can be found closer to home to offset the cost of commuting.

    Know what I mean?

  7. Motodisiac says:

    I agree with you on this one. In theory it’s easy to find another shitty job closer to home, however most of the time it’s complicated unless you’re single living alone.