Energy Survey: When gasoline prices fell, most consumers did not change their minds about how much they felt they could pay
The University of Michigan Energy Survey has released its latest results, condensing six quarters of data into a succinct analysis of American consumers' personal views about energy. This short summary explores attitudes about gasoline and home energy affordability in the context of the past year's dynamic gasoline prices.
The full results are available here.
Key findings include:
- When gasoline prices dropped over the past year, most American consumers did not change their views on how high the price would have to be before it greatly strains their household budgets.
- Those consumers who are most challenged by fuel costs (about 12% of respondents) do change their views on what they say they can afford when pump prices change.
- Of 3,000 consumers surveyed over six quarters, a clear majority (about 70%) regard $6 per gallon gasoline as unaffordable, while about 40% would find $5 gasoline to be unaffordable.
- Relative to recent pump prices, a 50% price hike would increase by only a few percent the fraction of consumers for whom gasoline costs become a serious strain on their household budgets.
An excerpt from the latest report:
Over the past year, Americans enjoyed a notable decline in the price of gasoline, which fell to an average of $2.27 per gallon in January 2015. In June 2014, it had been $3.77 per gallon. As shown in Figure 1, over the prior year and a half the national average for all grades was $3.56 (±0.16), over 50% higher than the recent January level. Since then, pump prices have risen, up to $2.80 per gallon as of May, but were still nearly a dollar lower than they were a year ago, saving drivers over $40 per month.
How does this price drop affect how Americans feel about the affordability of gasoline? As it turns out, most consumers haven't significantly changed their views of how expensive either gasoline or home energy would have to be before the cost hit a threshold level of strain on their household budget sufficient to force changes in everyday activities.
The University of Michigan Energy Survey asks consumers questions about how much they think they can afford for motor fuel and home energy (the latter including electric and home heating fuel bills). The survey was launched in October 2013; since then we have analyzed six quarterly polls based on in-depth telephone interviews, amounting to a cumulative sample of more than 3,000 households. Read more here.
The Energy Survey is a joint project of the University of Michigan Energy Institute and the Institute for Social Research.
Want to go in-depth? The Energy Survey Year One report is available here.
The project homepage of the Energy Survey is viewable here.