Why high gas prices fuel our anger

The demand drives us crazy, experts say.

Top off your Cadillac Escalade at D-Mart Citgo on Route K in Cape Girardeau, and a gallon of regular unleaded will cost you $2.54. Walk inside and buy the same quantity of whole milk and you'll shell out $3.99.

But which do we gripe about more -- the cost of milk or the cost of gas?

It's not even close.

Consumers complain loudly and often about the rising price of gas, but don't make a peep about the price of milk. People probably don't know that over the last 20 years, the costs of these two commonly bought liquids have increased by almost identical amounts. And prices at grocery stores overall have climbed even more than fuel prices, according to federal statistics.

Meanwhile, when inflation is factored in, the U.S. hasn't even reached historic highs for the cost of gasoline.

So why does the cost of fuel send consumers into a tizzy, making a fuss over gas more so than anything else we buy?

It's all about the perception of the consumer and the unwavering demand for fuel, according to Dr. Rebecca Summary, chairwoman of the economics department at Southeast Missouri State University.

The demand for gasoline, she said, is relatively inelastic. What that means, she said, is that when the price goes up, consumption doesn't change very much.

"When the price goes up, some people will cut back some, but they still have to buy gas," she said. "Either they can't cut back, or they feel like they can't cut back a lot. There's no substitute for gas."

Consumers have no choices, in other words. Summary pointed out that Cape Girardeau and Jackson, unlike larger cities, lack public transportation like a bus, train or subway system.

So gas-buyers have to keep on buying gas for their cars as opposed to less expensive public transit, she said.

"People have to have gas to get to work, to go to the store," she said. "So it hits them a lot harder in the pocketbook."

With milk and other groceries, less-expensive substitutions can be made, she said. Powdered milk for milk. Chicken for beef. Water for soda.

"With gas," she said, "you don't have any options. That adds to the frustration."

Summary also suspects the switch from fuel efficient cars -- spurred on by the energy crisis of three decades ago -- to gas guzzling SUVs has some consumers suffering buyer's remorse.

"Americans are switching back to gigantic, 9-miles-to-the-gallon SUVs," she said. "It's costing them $65 to fill up. I bet they're feeling the pinch of that."

Dr. Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University, agreed that consumers feel helpless when it comes to gas prices.

"They can't do anything about it and they don't understand why it's happening," he said. "They just see it as oil companies trying to grab more profits. They feel very helpless when gas prices go up."

Drivers are also bombarded with the cost of fuel because gas stations and convenience stores put up large signs that tout the cost of fuel.

"So they know what they paid for gas last week and they can tell right away when it changes," he said. "If milk goes up a dime, they may not even know it."

It's a similar situation when it comes to grocery shopping. Items are not usually purchased individually. They are all bought at once, so shoppers only have a vague sense of what each item costs. Outside of penny pinchers, they usually just know what the total shopping bill is.

"They're all kind of bundled together," he said. "Again, if it's a nickel or a dime more, you don't really notice it."

Still, consumers don't appear likely to change.

"Who cares about milk?" asks Mattie Gaithright of Tamms, Ill., who filled up last week in Cape Girardeau. "You can have milk or go without it. But not gas. If it gets above $3, you're going to really hear us start to howl."

smoyers@semissourian.com

335-6611, extension 137