Why Gas Prices Really Don’t Matter

Why Gas Prices Really Don’t Matter

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In the summer of ‘08 I was working as a professor at Hiram College, but was still a broke grad school student finishing his PhD.

I had met this med student at a party who I asked out and while we were figuring out the logistics, she told me she lived way across town and that she wanted to go to the movies. Immediately the ‘guy-math’ part of my brain started working as I calculated the cost of the movie, snacks, dinner, parking and the inevitable ice cream after walking around the moonlit plaza of Shaker Square Ohio.

Dating isn’t cheap. And on top of those expenses, I started thinking about gas.

Gas prices were insane that summer. In July of 2008 the average price of a gallon of gas was the highest in American history. It was going to cost me about an extra $15 to $20 to pick this woman up and drive us around all night. But, I still went on the date. And that explains why Obama’s re-election chances will have little or nothing to do with what’s happening at the pumps this spring.

There is a myth being perpetuated in some journalistic circles that rising gas prices alone harm President Barack Obama’s re-election chances. The truth is not so clear. In fact, there is a great deal of evidence that it’s not gas prices, but gas price volatility that might have people running angry to the ballot box. I won’t bury you in the details from your long forgotten college economics classes.  This really has to do with price elasticity and voting behavior.

Americans do not change their behavior very much with fluctuating gas prices, whether that’s shopping, food purchases or voting. The amount of change, whether at the ballot box or the pump has more to do with the volatility of prices than the actual price of gas. Which wreaks more havoc on your personal or family budget? A $.07 increase in gas that stays put for the entire summer or gas prices wildly fluctuating up and down 10 cents every other weekend?

You want to see real anger? Try driving to a gas station on a Sunday evening when they’re changing the prices from $3.69 a gallon to $3.75, then it’s back down to $3.64 the next weekend. It is the uncertainty of prices that causes more anger and frustration amongst voters than the actual prices themselves. Even the dreaded $4.00 gas, as terrible as that might sound to some people (except Californians who have been paying that for years) becomes tolerable if the prices remain stable. The real question is, does any of this really affect a president’s chances at re-election? The answer is: Not really.

Gas prices may impact how Americans view the overall health of the economy, which may in turn affect how the president is evaluated.  But, it’s not a direct correlation. For example, in a recent New York Times article by Binyamin Applebaum the gas/presidential approval connection was found lacking.

Gallup reported that President George W. Bush’s ratings fell to 48 percent at the end of October 2004, just before Election Day, from 60 percent in January. The price of a gallon of regular gas climbed 27 percent over the same period.

But gas prices often move out of sync with approval ratings, too. President Bill Clinton’s ratings rose to 54 percent just before Election Day from 42 percent in early January 1996, even as the price of gas climbed 13 percent.

The point being, there are all sorts of other factors that come into play when evaluating a president, and gas prices, in and of themselves, aren’t always that important. To get even more specific John Sides, a political science professor at George Washington University, wrote on his blog:

Or, to use a relevant contemporary simulation, a 30-cent increase—which is the actual difference in real gas prices in December 2011 and February 2012—is associated with a –2-point drop in approval.   (I also find that it is this change in gas prices, not the actual gas price itself, that drives presidential approval.)

So what does all of this boil down to for presidential politics?

1.      Americans don’t like high gas prices but they they hate volatility more. Slow consistent increase of gas prices are less likely to have political consequences than rapidly changing prices up and down.

2.      Gas prices are just one part of economic evaluations, which are linked to the president. If the overall economy is sluggish, then gas prices are seen as part of that problem, but if the overall economy is seen as improving then gas prices don’t’ have nearly as large an impact on voting behavior.

3.      The impact of gas prices on elections is inconsistent. Presidential approval is important – but in the end elections are about choices. November all boils down to a choice between two candidates and whether incumbent has high approval ratings (like Clinton in ‘96) or low approval ratings (like Bush in ‘04) they are still being compared to a challenger, who may or may not have the chops to take the job regardless of approval.

The next time you hear a political analyst talking about gas prices and the election remember that votes aren’t on the line. While gas might force Americans to make adjustments we’re going to keep doing what we always do. As a broke grad student I still went on that date back in 08.’ But, instead of going to Cold Stone Creamery after the movie we went back to her place and had some low budget Breyers. Regardless of gas prices we still weren’t missing out on dessert.

3 COMMENTS

  1. Gas Prices DO matter, they just don't have a direct correlation on someone gaining or losing votes in an election. George Bush was still re-elected even though gas prices from 2001 to 2004 were some of the most volatile in the previous 30 years. The same might happen to Barack Obama. Both Republicans and Democrats often try to make use of this issue.

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