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Issues in Political Economy , Vol 27 ( 1 ) , 2018 , 60-74 60 The Effects of Gas Prices on the U . S . Personal Saving Rate
| Content Provider | Semantic Scholar |
|---|---|
| Author | Zorbaugh, Alec |
| Copyright Year | 2018 |
| Abstract | Automobiles are the main method of transportation for the majority of Americans. A major variable factor in the cost of driving is the price of gasoline. Gasoline prices can fluctuate vastly from year to year, state to state, or even station to station. There has always been speculation that when gas prices decrease or remain lower than usual, consumers take the extra savings at the pump and use it for personal savings. It is unclear just how much of that additional savings is actually making it to their personal savings and how much ends up being spent as consumption. The JP Morgan Chase Institute claims that “consumers spend more of their gas savings than initially estimated” (Farrell, 2017), but just how much is considered “more...than initially estimated”? Since the personal saving rate has a large impact on long run economic growth, this paper will look at what effects the average annual gas price has had on the U.S. personal saving rate. We begin by looking at the statistical significance of the historical average gas price per year, along with a selection of other theoretically important variables, to the U.S. personal saving rate using regression analysis. We then examine the effects of adding lags to the model, and decide whether to leave all of the variables, or to remove some in an attempt to improve the model. From this, we determine what effect gas prices have had on the U.S. personal saving rate. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.elon.edu/docs/e-web/students/ipe/volumes/Zorbaugh%202018.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
