Dan Ariely has an interesting New York Times op-ed piece in which he argues that we pay too much attention to gas prices and not enough to the rising costs of electricity, food, and health care.
Looking back at my family’s expenses over the past few years, I see big increases in our health care costs and in how much we pay for food. The rise in what we spend on gas is not nearly as extreme as our increases in categories like electricity and telephone. So why does the amount we spend on gasoline feel so enormous? I think it is because of the way we buy gas.
Putting aside, for the moment, that throwing health insurance into the same mix with food is a red herring--you can live without health insurance (I have until recently) but not without food. What world does this man inhabit that he hasn't paid attention to his electric bill or phone bill?
I've lived in all manner of economic circumstances in my adult life, from near poverty to pretty well-off. Yet I've always paid attention to how much things cost and why the prices go up and down. And if Ariely doesn't think his electric or food bills get tied to the price of gasoline, then he really hasn't been paying attention.
I have no idea how much milk was six years ago, how much bread was three years ago or how much yogurt was a week ago. But I suspect that if I stood next to the yogurt case in the supermarket for five minutes every week with nothing to do but stare at the price, I would also know how much it has gone up — and I might become outraged when yogurt passed the $2 mark.
Milk is $3.08 for a gallon of 2%. Cucumbers cost 86 cents. A loaf of bread is $2.08. About four years ago, milk was around 2 bucks and cucumbers were 50 cents each. Bread was about $1.50. Why do I know these things? Because I budget, meaning I make decisions about what I feed to my family. Do we want cucumbers this week? (I love cucumbers, btw). What about bananas? And we buy milk and bread every week.
Maybe those are the sorts of things you know when you pay the bills. My husband does the household bills, so I haven't a clue what the electricity costs every month. But I can tell you how many groceries I can buy with $100 (answer: about a week's worth for four people).
And let's go to the health insurance red herring while we're at it. My husband just got on full-time at a large local company. We now have medical, dental and vision insurance, long-term disability, life insurance and so on. The price is the same as when I was purchasing health insurance for just my children and me (not my uninsurable husband). The problem with health insurance isn't just the price but that insurance companies really don't want to deal with individuals, which is why they will dump you as quickly as possible.
But seriously: our insurance in 2008 is less than it was five years ago when my husband worked for a different large company. This is why when Democrats throw health insurance into the same pot with gasoline and food purchases, it's a red herring. What you pay for health insurance is governed by a lot of other forces.
So, do we pay too much attention to gas prices? I doubt it. Gasoline prices had been fairly stable for most of the last couple of decades. Then the price spiked (and, Mike, the prices are going back down!) and so people noticed. It's not that we pay too much attention to gas prices. It's that most people are too lackadaisical about their other bills.
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