I’ve been quite enamored of the Environmental Economics blog of late. John and Tim have great things to say–especially regarding the recent spike in gas prices and all the hubbub it’s caused. If you’re the type of person that has an interest in energy issues (and who doesn’t these days), this is a worthy read.

Unfortunately, not everything in the world is so nicely reasoned. Tim recently posted the following, which is currently making its way around MySpace:

I had this forwarded to me a few times….I’m no expert, but it seems to make some sense:

Important! must read!! Make gas 1.79 by summer

We’ve all seen the emails to not buy gas on a particular day, or to boycott Exxon and Mobile. But, these will not work, because your level of gas consumption will not change, thus causing no overall price shift in the market. But, there’s a study being published this summer by two University of Chicago economists showing how if we buy more gas in May we’ll have lower prices from June through Septemember, just in time for vacations.

It’s based on what they call the “DVD example.” In 1998, a DVD player cost about $500, and hardly any were sold. But, from 1999 to 2002 DVD sales went up 78% each year, causing prices to go down to the $35 level they are today. It’s a simple economic theory - the more that is bought, the lower prices will go.

(read the rest here)

Ok, I know that not everyone has taken economics in his/her life, but let’s get one thing clear: buying more gas will never make the price go down.  Especially not in such a short run.  It’s like saying that the more you eat, the more weight you lose. Such thoughts should be relegated to late night infomercials where they belong. I can imagine it now:

How much would you pay for a product like this?  Well, I’ll tell you what.  You’re not gonna pay $3.00. You’re not gonna pay 2.90 or 2.80. You’re not going to pay 2.50 or 2.40, folks. You’re not going to pay two-dollars-and-thirty cents, no.  You’re not even going to pay two dollars like some of you may be thinking.  No folks, all you pay for this amazing gallon of gas is just one easy payment of $29.95 $1.79.

Do not go driving your SUV around all willy-nilly thinking that we’ll all benefit next month. We won’t; the price of gas will just go up more.  We’ll all be screwed.
If, however, you believe this nonsense and you need another tank to fill, you can always fill mine.

Posted on May 4th, 2006 by Lee
Filed under: Uncategorized