Gas Price Inflation

Got a chance to use Python for something I used to work on in MathCad or Basic.

In the Twilight Zone episode (1960), ‘The Hitchhiker’ a sign shows gas at 32.9 cents/gal.  Now it’s about 10 times higher.

As a baby boomer, I’m used to cautions about considering the inflation rate in retirement planning, but there is idea is abstract.

What is the average rate of gas inflation over a period of 54 years to produce a ten-fold increase in price?

Answer: 4.4%

Inflation over the Years

Decline of US dollar purchasing power from continued inflation
Decline of US dollar purchasing power from continued inflation

If all prices suffered from the same inflation as gasoline did, a dollar now would buy about 12% of what a dollar from 1960 did.

FYI. Dividing 72 by 4.4 yields 16 1/3 years, the # of years gas takes to double, if it increased smoothly at an average rate of 4.4%/year

Python code
import math
S = 32.9    # gas cost 32.9 cents in 1960 Twilight Zone ‘The Hitchhiker’
E = 329.0   # gas costs about $3.29 in 2014
n = 54
above = math.log(E/S)/(n-1)
r = math.exp(above) – 1
print(‘The average rate of gasoline inflation is’, ‘{0:3f}’.format(r))

Economic Policy Science

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