Guess Where Americans Are Plowing Their Gas Savings

Gas prices are 80 cents a gallon less than a year ago and $1.50 less than April 2014. With this amount of savings, the economy should be improving from all the extra cash in consumers' hands. You'll be surprised where much of the savings is going.

2 minute read

November 3, 2015, 6:00 AM PST

By Irvin Dawid


Gas Pump

Carolyn Franks / Shutterstock

"Here's a funny one: Americans have spent their gas savings on gas," writes Myles Udland for Business Insider. According to new figures on spending released last week by the Department of Commerce's Bureau of Economic Analysis (pdf) last week, "inflation-adjusted personal consumption expenditures on gasoline rose 4.1% over the prior year, the most in at least 15 years."

What's surprising is what Udland doesn't attribute the increase to. No mention of driving more, or switching to gas-thirsty SUVs from compact cars, though I suspect both play a role, but I'm getting ahead of myself.

Udland wasn't surprised at the increase in gasoline spending as he anticipated it in a column he wrote in September. "The last time oil prices crashed and brought down the price of gas, US consumers spent more money on gas," he wrote.

According to behavioral economist Richard Thaler, "households typically have rigid 'buckets' of spending — $80 per week on food, $100 on gas, $500 for a mortgage, and so on. Humans tend to stick to their buckets," wrote Udland.

Thaler found that "(t)he shift toward higher grades of gasoline was fourteen times greater than would be expected in a world in which money is treated as fungible."

What's more, upgrading to "premium" was not found in other 'budgets' such as particular food items. "The one exception to that tendency was more splurging on upscale gasoline." [Emphasis is Udland's.]

Udland continues in the Sept. 5 column to indicate where the gas savings have gone—primarily increased savings, as opposed to retail sales other than gasoline.

Hat tip to Loren Spiekerman.

Thursday, October 29, 2015 in Business Insider

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

June 11, 2025 - Diana Ionescu

Metrorail train pulling into newly opened subterranean station in Washington, D.C. with crowd on platform taking photos.

Congressman Proposes Bill to Rename DC Metro “Trump Train”

The Make Autorail Great Again Act would withhold federal funding to the system until the Washington Metropolitan Area Transit Authority (WMATA), rebrands as the Washington Metropolitan Authority for Greater Access (WMAGA).

June 2, 2025 - The Hill

Large crowd on street in San Francisco, California during Oktoberfest festival.

The Simple Legislative Tool Transforming Vacant Downtowns

In California, Michigan and Georgia, an easy win is bringing dollars — and delight — back to city centers.

June 2, 2025 - Robbie Silver

"Stage 4" soundstage wall seen through ornate metal gate at Paramount Studios lot in Los Angeles, California.

Demise of Entertainment Industry Mirrors Demise of Housing in LA

Making movies has a lot in common with developing real estate: producers = developers; screenwriters = architects; directors = general contractors. The similarities are more than trivial. Both industries are now hurting in L.A.

6 hours ago - California Planning & Development Report

Two young women roller skating in a park on a sunny day.

How Public Spaces Exclude Teen Girls

Adolescent girls face unique challenges and concerns when navigating public spaces. We can design cities with their needs in mind.

7 hours ago - Next City

Ohio State Senate building nwith modern downtown Columbus skyscrapers in background.

Proposed Ohio Budget Preserves Housing Trust Fund

The Senate-approved budget also creates two new programs aimed at encouraging housing construction.

June 12 - Ohio Capital Journal