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April 22, 2006
It's getting tougher owning a car isn't it. Chocked roads in the cities, accidents on the freeways, rising petrol prices and the increasing use of tollways.
Leahy
The impact of rising petrol prices is also in being felt in the reduction in discretionary family spending, most particularly men clamping down on buying new clothes. According to an article in the Australian Financial Review the priority of discretionary family spending is: the kids, the wife, the dog, then if there is any money left, then the husband.
It was meant as a joke by the retailers, but one that has a grain of truth.
I reckon that there's a substantial segment of the population that spends a very big chunk of their income on gasoline, and in the past 12 months they've seen gasoline prices increase by 50%. Is it the same population segement whose household income has been decreasing and their household debt rising I wonder?
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This is a graph of Walmart's sales vs gas prices. There appears to be a fairly strong correlation that high gas prices hurt the disposable income of their customers.