The "real" price of gasoline: Gasoline cost 27 cents a gallon in 1949 compared to around $3.00 today.* How has the relative cost of buying gas changed over the last 58 years? Presented here are two tables computing the annual "real" cost using our five indicators, one in 2006 dollars, the current number used for real GDP, and the other in 1949 dollars.While the two tables show the same trends, they do give a different perspective.

Using the 2006 table and the CPI and the GDP deflator, we see that gasoline was most expensive in 1980 and 1981 and the cheapest in 1998 and 1999. Today, the real price using these two measures is between 30 to 45% higher than the 58-year average for them.

As a share of the (approximate) Consumer Bundle, the story is even more striking. In 1981, a gallon of gas took 60% more out of the average consumer bundle than it did in 2006. Thus in 2006 prices, the relative price of gas in that year was $3.86.

The other indices tell a different story. Let us look at relative cost to an unskilled worker to fill up using 1949 dollars. That year the 27 cents it cost for a gallon of gas, took a certain share of the worker's wage. The interesting question is, has the cost as a share or percent of the worker's wage increased or decreased over time? The table shows that for the wage rate and price of gasoline in other years, this cost has fallen. Since wages have increased faster than the price of gasoline, by 2006 an unskilled worker spends only two-thirds as much, as a percent of wage, for a gallon of gasoline than the 1949 worker. The table shows that the $2.59 a worker paid in 2006 would be comparable to only 18 cents (in 1949 prices) if measured as a "share" of the wage.

When we use the GDP per capita, the cost has fallen faster. Looking at the table shows that a gallon of gasoline costs around 11 cents a gallon (in 1949 prices) if measured as a "share" of the GDP per capita. This is because in 1949, 27 cents was .015% of per capita GDP, while in 2006, $2.59 was .006%.

Finally, looking at what share of GDP of gasoline, we see that in 1949 prices, it is about 4 cents. This means that a gallon gasoline was a seven times larger share of output in 1949 than it is today.

* The nominal price of gasoline can be found at found at http://www.eia.doe.gov/emeu/aer/petro.html For the table used here, I used the price of a gallon of leaded regular from 1949 to 1976, the average of the price of leaded regular and unleaded regular from 1977 to 1990 and the price of unleaded regular from 1991 to 2006.