Saturday, December 21, 2013

Convergence of State-Level Gas Prices Over Time: Pennsylvania and California

I've noticed since I've lived in California that as gas prices have risen, the absolute difference in gas prices between California and much of the rest of the country has remained relatively constant. This means that the percent difference between California and other states' prices has shrunk. In other words, if you're paying a dollar a gallon in California and 75 cents elsewhere, that's something. If you're paying $4.75 in California and $4.50 elsewhere, who cares. Assuming that cost of living differences remain constant over this time, other states will fill gasoline taking a bigger bite of their budgets. And that's more or less what has happened since the late 90s, using Pennsylvania as an example:

Data is from the Energy Information Administration website and doesn't extend past February 2011 for some reason.

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