Relative prices of grades of gasoline

From: Coffin, Donald (dcoffin@iun.edu)
Date: Mon Sep 12 2005 - 16:41:30 CDT

  • Next message: Antony Davies: "RE: Relative prices of grades of gasoline"

    One of the things I've noticed, over the past year-and-a-half or so is
    that the price of premium gasoline has declined relative to the price of
    regular. At least where I am. (The numbers are sounded.)

                    Early 2004 Now
    Regular $1.80 $3.00
    Premium $2.00 $3.20

    Rel.P 1.11 1.07

    A couple of questions. Is this just a Midwest phenomenon? Does anyone
    have a reasonably convincing explanation of the unchanged absolute price
    differential (even further in the past, the money prices were about $1
    for regular and about $1.20 for premium)? Is there any evidence of a
    shift from regular to premium as the relative price of premium has
    declined?

    It makes for an interesting discussion in class, by the way.
    Don Coffin

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