Monday, May 7, 2007

Urban Legend

A couple of times in the past week I've seen chain-letter style e-mails depicting various forms of "don't buy gas" day theories of reducing the price of gasoline. The "economics" behind these e-mails is atrocious. Shifting gas purchases away from one day or away from one retailer will do nothing to reduce the price of gasoline. The whole idea is exposed as a recurring urban legend at snopes. com. If Americans significantly and over an extended period of time reduced gasoline consumption, there could be some effect on gasoline prices if supply bottlenecks were eased, but the underlying dynamics of crude oil costs, refining costs, and transportation costs would remain relatively unchanged.

No comments: