Do they take into account the fact that until the late 1970s most gas stations were full service and that most today are self serve? I heard a piece on NPR the other day, where they said that gas prices in 1957, if you adjusted them for inflation were $2.11/gal and I couldn’t help but think, “Yeah, but that was full serve.” If they’re not, then their adjustments are even further off than they seem to me.
No, plus they average Oregon and NJ into the current average price, even though they are still full serve. (And yet NJ somehow still stays near the bottom.)
It shouldn’t make a difference. What they’re figuring out is the retail price. In the past, the retail price included someone checking your oil and washing the windows. It wasn’t like you had an option to pump the gas yourself in the 1950s. That was just how the gas station business operated.Tt
There are many different factors for the prices of goods of any type. It’s also tricky to compare prices using inflation calculators. What someone needed to buy in 1957 was a lot different than what they need to buy today.
BobT: Another confounding factor is how many things we commonly buy today that simply didn’t exist 25, 50, or 100 years ago. Not to mention how many things we used to buy that have been replaced or obviated by technological or social change (buggy whips, bustles).
I suppose the big lesson is that even when you adjust for inflation the numbers still don’t mean all that much.
It’s also fairly doubtful that anyone is factoring in the inflation of the distance and time commuted. 1957 was near the dawn of suburban sprawl, and what was considered a distant suburb at that time would now be considered “in the city”. Plus you didn’t drive the kids around to soccer practice, lessons, etc. I typically fill up with gas 1.5-2 times a week, plus we have two cars for our household. One car households were a lot more common back then.
I don’t know if anyone has, but you could do the right calculation if you wanted. The distinction that’s important here is between basic and purchasers’ prices. I know that these prices are measured and published in the input output data these days. The basic price is (roughly) the price producers get paid, whereas the purchasers’ is the basic price plus sales taxes and so-called margins. Margins are inputs used to facilitate the sale of goods. Retail and wholesale services as well as transport and financial sevices are the relevant margins here.
So you could strip out what has gone on with the “pure” petrol price and what has gone on with the margins. I dunno what effect this would have, as there have been enormous changes in wages, land prices and productivity over the years in petrol stations.
I don’t see how that would affect the price of a gallon of gas. It could affect the amount spent on gas by a typical household, though.
The numbers still mean more than having no comparrison. Economists have noted this discrepancy. I tried starting a GD thread around the notion if we are more wealthy than before. According to GDP listings, yes we are, but not all the time – with the decade or a couple of years of measurement, one year may be richer than another (e.g. 2001 was worse off than 2000); however, definitely richer between decades and centuries.
Like I said, economists note this discrepancy and have made axioms in their calculations to deal with this. They use very complicated statistical methods (i.e. econometrics) to adjust for this. So, a comparison between 1990’s prices and 1890’s prices are going to have some discrepancies, but will be true overall; whereas a comparrison between 1990 and 1998 will be much more accurate.