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April 04, 2021

Do higher gas prices really affect how you drive?

Gas prices have been on the rise in recent weeks and are already taking a toll on consumers’ wallets, particularly in the United States -- or so the folks across the border would have us believe.

70% say recent price increases in gas have caused financial hardship in their households — about triple the number from only a few months ago.

Of course, our American friends still aren’t really paying a lot for gas. The state-by-state average ranges from $3.53 a gallon in Wyoming to $4.37 in California.

In Canadian terms that works out to a low of 90¢ a litre to a high of about $1.16. Even though gas prices here jumped again this morning, that’s still lower than every Canadian province but Alberta, however.

Angry motorists say it’s highway robbery to be charged $1.40 for a litre of gas. But do they drive less as a result? Apparently not.

In his latest column for the New York Times Magazine, Adam Davidson (a carless New Yorker if there ever was one) decries this outcry as smoke, arguing that it costs most people less than $2,000 a year in gas to drive anyway and that rising prices clearly have little impact on consumer behaviour -- even though they should.

"Americans may protest loudly, but their economic behavior indicates a remarkable indifference to the price of oil," he says. "As unpopular as it may sound, the best possible future for most Americans may involve much higher gas prices."

Sure, assuming you live next to the subway. But what about everbody else in this vast land?

Are we really any different though? Does another 10¢ a litre affect what you do day to day?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...