11/20 If gas price doubles, what are some states that'll suffer more
than the others? Farm states? States that lack cities/mass transits?
\_ States where residents pay a larger proportion of income for fuel.
In consumption per capita the top states are Wyoming, the
Dakotas, Alabama, and South Carolina. California is #51 (list
includes DC). In consumption per $ GDP the top states are
Mississippi, Montana, Alabama, Arkansas, and Oklahoma.
California is again #51. (Source: http://tinyurl.com/yvsxav
\_ California and NY both have residents who pay a lot for fuel,
*and* have to have goods trucked in to large population centers.
Your gas will cost more, but so will your vegetables.
\_ The expensive states spend more as a proportion of income
on things somewhat unaffected by fuel prices like housing and
insurance and less on things like vegetables. I also
suspect that fuel costs are a smaller proportion of
operating costs as a percentage of sales price in states
like CA where items like food are so expensive relative
to other states.
\- you're sort of on to something, but i think a more
correct "econ dept" analysis is "wealthier people spend
a smaller fraction of their incomes on non-discretionary
purchases, and thus they can more easily adjust to price
changes. you can drink "second growth" wines instead of
premier crus as the dollar falls. you can decide to stay
in star-- hotel on your vacation if the if you are
spending more on gas around the year. but that is
different than trying to change your food or utility
bill 24x7." however this is analyzies the "welfare" or
"utility" impact, not the prices. but when you say
"suffer" that's what you mean. obviously a "luxury tax"
on +100ft yachts will raise the price, but you cant
really call that suffering. anyway, again you are on to
something when you look at prices and the composition of
expenses but you have to factor in substitution effects.
and in that case i'd look at "rich" vs "poor" rather
than cost of living. [e.g. poor people in the bay area
dont have high heating bills in the winter].
an interesting philosophical detour is to look at the
"utility monster" aspect to this. although this is
better looked at across more disparate populations, like
say us vs china, rather than california vs alabama.
per diminishing marginal returns, somebody making $10k
a year will get more utility from making an extra $1k
per year and thus lose more from not making the extra $1k
compared to somebody making $100k. however the question is
if the $10k person has sort of adapted to low expectation
but the spoiled and weak person at $100k sort of expected
to keep getting raises and "suffers" serious shopping
withdrawal, who is really suffering more? obviously it
is hard to suggest public policy should compensate the
whiney/subjective utility.
\_ You think vegetables grow in Montana? There is actually
quite a bit of economy of scale in shipping vegetables to
large urban areas. I wouldn't be suprised if it actually
cost more to ship to smaller morkets that are closer.
cost more to ship to smaller markets that are closer.
\_ Umm.. I know some people who grow vegetables in Montana.
Hence, yes, I think vegetables grow in Montana. They also
grow in California, and many other places.
\- Famous Montana Potatos. there are a lot of cerial
\- Famous Montana Potatos. there are a lot of cereal
crops grown in montana, although i dunno how much
of this makes econ sense and how much of this is
because of crazy subsidies.
amazingly enough, there is a proposal to grow
sugar cane in the imperial valley [read desert +
massive water subsidies = crazy plans]
\_ I used to live in Montana. No one is growing any
significant quantity of vegetables there, unless
they are using a hot house. It freezes too late
and too early. |
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