How Much Do Gas Prices Affect Austin’s Economy?
Friday, February 4th, 2011A surprising amount of money.
Recent events in Egypt have resulted in higher crude prices. Crude in London just closed above $100 a barrel for the first time since 2008. Remember how high gas prices got in 2008? It wasn’t pretty. We intuitively know it hurts. But, really, how much money actually gets taken out of Central Texan’s pockets when gas prices go up that much? More importantly, how does that affect our regional economy? That’s kind of important, isn’t it?
Take a look at these two maps from the Center for Neighborhood Technology (CNT) showing the difference, from 2000 to 2008, in how much of a Central Texan’s income was spent on their transportation. (article continues after the graphic)
One can derive other insights from these two maps, but, for one, they show that we collectively spent a higher portion of our income on transportation as time progressed. Central Texans are expending a good portion of their treasure on commuting. Here’s another way to look at it: Gasoline costs per capita went from $1098/year in 2000 to $3028/year in 2008. (2009 CNT) That’s greater than inflation (which excludes gas volatility) The five county area had 1.64 million people in 2008 (COA demographer), meaning that those people spent $3.2 billion (3,180 million million) more on gas than that same number of people would have spent in the year 2000. That rise is greater than inflation (which excludes gas prices). The increase alone is more than three times the annual budget of AISD and about the size of the City of Austin’s budget which employs 10,000 people. How much of that $3.1 billion came back into the local economy? Probably some, because some locals own gas stations or own Exxon stock, but still, it’s hard to imagine much of that money stayed in Austin.
The next question would be – can we do anything about it? I mean, aren’t all the policy levers in Washington, D.C., or at the very least, with “the Lege”? Are all the solutions the ones that we’ve heard of before? In upcoming posts, we’ll explore different approaches, and their potential effects not only on our economy, but also on quality of life issues. And no, it’s not *only* looking at solutions that spend money on transit – or necessarily buying more efficient cars. In fact, our blog will expand to reach topics of how we physically arrange buildings and our transportation networks, but we’ll also explore some “low hanging fruit” — but please forgive me in advance if *some* of the ideas will be about transit, okay? — Chris Ewen
