MAKING IT COUNT!

If the current gas savings of $1.103 per gal (vs last yr at this time) is continued throughout the year, the US economy would be ble$$ed with a total savings of $132.36B±. WOW! If this projected US gas savings was the GDP of a country, it would have the 66th biggest economy in the world fitting b/t Slovakia at #65 and former inhabitant of the 67th slot, Angola (CIA World Factbook. For the sources and methodology of our miles & gas savings info for US estimations, please see the next page).

T.1: The GDP of the New Nation, “US Gas Savings”

Rank Country GDP
66 Slovakia $133.400B
67 US Gas Savings $132.360B
68 Angola            $131.800B

For the record this new nation’s economy would be a Top 30% country on the global economic stage.

T-2: Total Gas Savings for 1 Year given an Avg Gas Price Reduction of $1.103 per gal

YEARLY MILEAGE 12,500 MILES 15,000 MILES 17,500 MILES 20,000 MILES
SAVINGS PER GAL $1.103 per gal $1.103 per gal $1.103 per gal $1.103 per gal
MPG 25 25 25 25
SAVINGS, 1 DRIVER $551.5 $661.8 $772.1 $882.4
SAVINGS, 2 DRIVERS $1,103.0 $1,323.6 $1,544.2 $1,764.6

T-2 presents the gas savings data in a different context than T-1. We list 4 alternative mileage driven scenarios, ranging from 12,500 miles to 20,000 miles driven per yr. We used the same gas savings per gal ($1.103) and made the same mph assumption (25) that we used in T-1.Given those data, we calculated what both a fam with 1 driver and 2 drivers would save in gas consumption for 1 yr. We choose, 2 drivers who each drive 15,000 miles per yr, for our consumption model b/c it corresponds to our family of 4 with 2 drivers’ scenario that we use from time to time. Together, they will save $1,323.6. Given these savings, what could our theoretical fam (or consumer unit) do with its new found gas savings? To answer that question we turned to the most relevant piece of info available, the Survey of Consumer Expenditures (Bureau of Labor Stats) to determine how an average consumer unit (household±) might spend its newfound $$. We present possible spending equivalence for the aforementioned savings.

T-3 (next pg) identifies some of the spending “equivalents” for our consumer unit (HH±) by noting these consumer expenditures (and their costs) over 1 yr. Below, we note but 7 possibilities.

  • ALL apparel purchases and their services for 1 yr cost our consumer unit ………………………..$1,604
  • ALL cereals & baking products fruits and veggies (for 1 yr) cost our consumer unit ……………..$1,295
  • ALL phone services cost our average consumer unit ……………………………………………..$1,271
  • ALL entertainment expenditures amount cost ………………………………………………………..$1,241
  • ALL meats, poultry, eggs and ALL life and other personal insurance for 1 yr cost ……………..$1,174
  • ALL educational services (for 1 yr) cost …………………………………………………………………..$1,138

T-3 Average Expenditures for a Consumer Unit (Household) for Select Items for 1 Yr

All Food Away from Home $2,625
All Gasoline and Motor Oil $2,611
All Entertainment

–       Entertainment Fee and Admissions

–       Audio and Visual Equipment and Srvs

–       Pets, Toys, Hobbies, Playground Equip.

$2,482

$569

$964

$596

All Apparel and Services $1,604
All HH Furnishings and Equipment $1,542
All Electricity $1,422
All Phone Services $1,271
All Home Maintenance, Repairs,

Insurance, and other expenditures

$1,182
All Household Operations $1,144
All Educational Services $1,138
All Meats, Poultry, Fish, and Eggs $856
All Beverages (Alcohol and not) $829
All Fruits and Vegetables $751
All Personal Care and Services $608
All Cereals and Baking Products $544
All Life and Other Personal Insurance $318

Source: Consumer Expenditure Survey (2013)

T-3 presents the 16 different, general categories that conceivably could be combined or divided in 1/2 so that they could be used as “set offs” or “equivalents” to the great American Gas Savings for 2015 of $1,323.6 (for our 2 drivers in a fam of 4) given an avg consumer unit (HH±). The avg CU in 2013 had an income of $51,100. Not included in our discussion of T-3 are such major general expenditures as Housing ($17,148), Transportation ($9,004), Utilities, Fuels and Public Services ($3,737), Healthcare ($3,631). Of course ALL of them could be used in discussion if so desired.

Finally, we must state that if gas prices do remain at historical lows BIG MOBIELS will be sold with the F-150, Silverado & Dodge Ram still being atop sales charts again this yr. Furthermore, there will be more than 3T miles travelled this yr with even greater savings with remarkable deals & steals being made available for smaller mobiles. Waddadeal, Waddadeal!

Grand Mileage Estimations

For our grand estimations, we used 3T miles travelled per year (See FRED, “Econ Data”, StL Fed) with a mpg of 25 and a cost difference for all shades /all grades of gas as $1.103, which is the yrly diff, Jan 2015 from Jan 2014. (See US Energy Admin)

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About bernacmd

For over 24 years, University of Detroit Mercy Marketing Professor Michael Bernacchi, Ph.D., J.D, has produced "uNDER tHE mIKE-rOSCOPE", a newsletter discussing current "marketing and advertising¹s bends, trends & ends." A well-know fixture in Detroit and national media, UDM's marketing guru has made several appearances on CNN's "Talk Back Live," the Voice of America worldwide radio network (VOA), ABC, CBS, NBC, MSNBC and on the pages of Sports Illustrated, Time, TV Guide, the New York Times, USA Today, the Wall Street Journal and the Washington Post, to name a few. At University of Detroit Mercy, he has taught courses in Marketing Management, Consumer Behavior, Marketing Communications, Research and Corporate Social Responsibility and Sports and Entertainment Marketing. Michael Bernacchi can be reached at 313-993-1116 or bernacmd@udmercy.edu. Please appropriately attribute the following for their work on uNDER tHE mIKE-rOSCOPE: Yen Ju Lee Robert Rouse Vidhyasagar Natarajan Eric Baumgardner & Ian Young
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