When gasoline prices are low, as they were in July 2003, families spend an average of 4.6% of their median incomes on gasoline; but when prices spike, as they did in July 2008, households spend more like 11.5% on gasoline (Ma, 18).
So what can consumers do vis-a-vis shopping for groceries when gasoline prices take away significant portions of their disposable incomes? Firstly, on page 21 Ma explains that smart shoppers go to warehouse club centers and "supercenters" where prices are lower due to the mass volumes of products sold there. Yes, Ma admits, supercenters and warehouse clubs may be further away than local grocery stories, causing more gasoline to be used; but on the other hand, customers buy in bulk at those outlets, reducing "the number of shopping trips" necessary (21). Secondly, smart grocery shoppers turn to "private labels" on food products that are as a rule 20% to 30% less than national brand labels (Ma, 21).
Will higher gasoline prices have a positive impact on America's rising obesity rate?
While Americans are being more selective about where they shop for groceries -- due to the higher cost of gasoline -- the higher prices may as well lead them to be more attentive to their own health as well. The author of an article in the scholarly journal, Economic Inquiry suggests that higher gasoline prices could cause people to walk more often (rather than driving) and could lead to a "…reduction in the frequency with which people eat at restaurants" (Courtemanche, 2011, p. 935).
Courtemanche offers three ways in which the rise in gasoline prices can affect body weight: a) with less money to spend, individuals may take , given the history of the fluctuation of gasoline prices, one can fully expect that even though they are down right now, they will rise back up. It is important for the consumer to understand the relationship between global crude oil supply and demand and the cost at the pumps in the United States. It also seems appropriate for the consumer (in times of high gasoline prices) to be aware of ways to save money at the grocery store, and to use that period of time as a way to get healthier by walking and eating at home.
Works Cited
Courtemanche, Charles. "A Silver Lining? The Connection Between Gasoline Prices and Obesity." Economic Inquiry, 49.3 (2011): 935-957.
Kilian, Lutz. "Explaining Fluctuations in Gasoline Prices: A Joint Model of the Global Crude Oil
Market and the U.S. Retail Gasoline Market." The Energy Journal, 31.2 (2010): 87-111.
Ma, Yu, Ailawadi, Kusum L., Fauri, Dinesh K., and Grewal, Dhruv. "An Empirical Investigation
of the Impact…
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