Gas Prices As Percent of Income Are Still Affordable

by: Mark J. Perry

The chart above shows the cost of 1,000 gallons of gas at the retail price in each year from 1919 to 2007 using historical gas price data from the EIA, as a percent of GDP per capita in those years using data from Global Financial Data (paid subscription required).

1. As a percent of per-capita GDP to purchase 1,000 gallons of gas, gas prices in 2007 (about 6% of per-capita GDP) are still not even close to the levels reached in the early 1980s, when it cost 9-10% of per-capita GDP to purchase 1,000 gallons of gasoline in 1980, 1981 and 1982. It's true that the inflation-adjusted prices of gas and oil are now about the same as in 1981, but per-capita real GDP is almost twice as high today as then!

2. Except for the 1990s, gas prices today as a percent of per-capita GDP are lower than every other previous decade: the 1920s, 1930s, 1940s, 1950s, 1960s, 1970s and the 1980s!