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Gasoline: Still Cheaper Than Ever

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You already know that gasoline costs ten cents a gallon in the alternate universe where we are still on the gold standard. Now Glen Williams demonstrates that gasoline is cheaper today than twenty-five years ago when measured as a fraction of household income.

Even looking at the poorest fifth of the population, the fraction of income required to buy gasoline is still lower than it was in the early '80s. Not surprisingly, the fraction has risen a great deal over the last few years, but it still has not surpassed its historical peak. The same holds true for every other income quintile, but the effect is more muted, since higher income means any given price difference will correspond to a smaller fraction of income.

In short, we're still in an era of cheap fuel. It's just not as cheap as it was a couple of years ago.

Affordability of Gasoline