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Keep the car running: retail gas sales and prices


Fuel has the reputation of being very price-inelastic: Consumption changes little even when the price changes. One way to illustrate this relationship is to compare the gasoline sales with prices. This is done in the graph above, and it is very clear these two measures move in sync. It is even more apparent if you look at their growth rates, shown below. Except for the recent recession, the growth rates are almost always very close to each other: The price swings only a little more widely, indicating that quantities respond very little to price changes.

How this graph was created: Search for one series, graph it, then add the other series. For the top graph, select the right axis for one series, as the scales are very different. To create the bottom graph, place both axes on the left and select “Percent Change From Year Ago” for both series.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: DCOILWTICO, GASREGW, RSGASS


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