Curious How High Gas Prices Will Climb Before Habits Change
BOSTON (CBS) - Gas prices are showing no sign of dropping anytime soon, as Massachusetts drivers are now paying, on average, $3.35 per gallon.
Larry from Chatham Declared his Curiosity, asking:
"Gas is up $0.17 per gallon. Panic or minor issue? Just give up a Starbucks or a Big Mac and you break even!"
When you crunch the numbers, our curious viewer's math adds up.
Drive 12,000 miles per year in a car that gets 20 miles per gallon, and our recent 17-cent spike is equal to $1.96 per week. That's one less iced coffee.
So, how high will prices have to climb before we all start to change our habits?
WBZ-TV's David Wade reports.
Peter Cohan teaches business strategy at Babson College. He said there's no magic, life altering number like $4 a gallon.
Historically, we react more to the speed of the price increase than the number on the pump.
"When you go back to 2008 when prices hit $4.20 a gallon...consumers changed their behaviors when prices went up 30 cents in a month. It really shocked consumers," said Cohan.
Our expert said that when gas prices go up slowly, we find it annoying, like a constant flurry of snow. But, a sudden spike does get our attention like an icy snow ball.
So, has our 20-cent spike whacked us that hard? Cohan thinks we have a little ways to go.
"We're at $3.30. If in the next week or so we see prices go up another 10-20 cents a gallon, I think it's going to shock people into saying 'I really need to change my habits,'" said Cohan.
The change in habits could mean, according to Cohan, more people piling onto MBTA trains, which may not exactly good medicine for our fragile psyche.
