With the price of gasoline climbing, consumers may opt to change the way they live to get around the consequences of fuel inflation. Here are four ways Americans might adapt to pricier gasoline:
Exodus to Mass Transport: With gas prices draining our wallets, Americans may choose to avoid spending their own money on gasoline altogether. In 2011, there was a 2.3% greater daily passenger volume on mass transit than that recorded in 2010, according to CNN. The higher gas prices rise, the more consumers might choose to avoid driving personally owned vehicles.
Decline in Vehicle Purchases: Going along with that, when gas prices rise, purchasing a new vehicle sometimes becomes much less appealing. If regularly driving a personally owned vehicle becomes a financial burden, consumers might be turned off from purchasing new cars altogether.
Frugal Grocery Spending: Since agricultural commodities need to be remotely grown before arriving at your local supermarket, the price of groceries is directly tied to the price of gasoline. As the Utopianist reports, if diesel becomes more expensive, then the overall price for a week’s groceries will increase as well — ultimately leading consumers to limit their grocery spending.
Less Travel: As the Los Angeles Times reports, since the price of airfare is directly tied to the price of jet fuel, rising fuel costs may cause more frugal consumers to shy away from traveling this year. Assuming fuel costs continue to escalate, more and more consumers may opt out of their annual vacation.
– Adam Patterson, InvestorPlace Assistant Editor