If I ever become an Economics teacher or professor (rather unlikely), I’m going to go back to DC and take a picture of the scene I saw there with gas stations.<\/p>\n
Gas in most parts of DC was $3.99 to $4.09, about the same as it was here in New Hampshire. But then we drove by a gas station inexplicably charging something like $4.59 a gallon, directly across the street from a place charging something like $4.39 a gallon. My gracious hosts told me that the price discrepancy was long-running: these places have arbitrarily* charged significantly more for quite some, and remain in business.<\/p>\n
The reason I’d begin with this is threefold:<\/p>\n
It turns out that a few things are going on allowing them to charge this much, as I learned from the driver of our shuttle back to the airport. <\/p>\n
The first is the simple fact that it’s located in the middle of a bunch of millionaires’ homes and apartments. If you’re driving your Mercedes from your $6 million condo to your country club in the suburbs, do you really care if gas is $4.59 or $3.99? (I<\/i> would: I’m convinced that people who stay<\/i> rich are the frugal ones.)<\/p>\n
Further, it’s apparently a full-service station. You pull in and they fill up your tank for you. They probably wash your windows and say, “Good afternoon, Dr. Barlow” to you with a bit of a bow. (Assuming your name was Dr. Barlow, although I’d be hard-pressed to think of anyone by that name.)<\/p>\n
But perhaps most interestingly of all? The shuttle driver mentioned that a lot of the customers are people driving company cars, or on business trips. In other words, they’re not paying<\/i>. If your company is paying for your gas, do you care if it’s $4.59 or $3.99? If the line at the $4.59 place is shorter, you’re going there—the benefit to you is greater (a shorter wait), whereas the cost to you is the same (free!).<\/p>\n
How many other people do you think had the same thoughts upon seeing these gas prices?<\/p>","protected":false},"excerpt":{"rendered":"
If I ever become an Economics teacher or professor (rather unlikely), I’m going to go back to DC and take a picture of the scene I saw there with gas stations. Gas in most parts of DC was $3.99 to … Continue reading