: Time is money: Drivers will only go so far out of their way to find cheaper gas
A driver’s hunt for cheap gas only goes so far.
Coming at a moment when many people are rethinking their driving routines so they can loosen the pinch of record-high gasoline prices, new research endeavors to find out just how far drivers will go out of their way to find stations with cheaper gasoline prices.
Though drivers could save nine cents a gallon if they drove up to two minutes away from their shortest route, researchers dissecting GPS data from 2009 to 2010 said the median time they spent driving off their shortest route was a one-minute detour.
“Drivers find it very costly to travel to cheaper stations that are away from their route,” said researchers at University of Arizona, Indiana University’s Kelley School of Business and Instituto Tecnólogico Autónomo de México’s (ITAM) Center for Economic Research, based in Mexico City.
“Drivers gain little from learning about stations’ prices located further from their routes,” they added in a paper distributed by the National Bureau of Economic Research. Drivers valued their travel time at $27.54/hour, which was 89% of the median wage for the sample, according to the study’s estimates.
The researchers analyzed University of Michigan data from southeast Michigan drivers between April 2009 and May 2010. The drivers logged after 6,275 hours of driving and 224,700 miles on the road. In that span, the average gas price was $2.60 a gallon, the study said.
By contrast, Americans were paying $4.32/gallon on Monday, according to national price averages from AAA. That’s down a penny from the $4.33/gallon price record hit on Friday, as Russia’s invasion of Ukraine continues to roil crude oil markets.
The price on oil futures pulled back Monday on the hopes of progress of talks on a cease fire. The price on West Texas Intermediate crude for April delivery was $102.27/barrel on the New York Mercantile Exchange, down more than 6%.
Make no mistake, drivers in the study were intensely aware of prices and will drive a little extra to save money. Gas stops were “relatively close to a driver’s route” but researchers emphasized they usually did not go for the easiest nearby station to fill up.
“‘Drivers almost always drive further out of their way for gas than they need to.’”
— Researchers at University of Arizona, Indiana University and Instituto Tecnólogico Autónomo de México’s Center for Economic Research in Mexico City.
“Drivers almost always drive further out of their way for gas than they need to,” they wrote. Nine out of ten times, they had gas-station destinations that were 15 seconds within their route, but chose those only 40% of the time.
“This pattern of drivers choosing stations that are slightly out of the way but not too far off their route is consistent with the decreasing marginal savings from driving further,” they said.
The observed drivers were often creatures of habit, picking gas stations that were under 10 minutes from their home 68% of the time and 86% of the time opting for gas stations they drove by in the past.
The question now is whether high prices break those habits as more people return to the office — and the office commute.
More than half (59%) of drivers said they would change their driving routines if gas passed the $4 mark and three-quarters said they would do it for gas prices topping $5, according to a recent AAA survey.
Eight in ten drivers said their cost-saving approach would be driving less.
Indeed, rising gas costs are forcing some Americans to reshape their weekly routines and either cancel or scale back their vacation plans with spring and summer approaching.