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Perspective

The trick $3 gas plays on us

Lower prices at the pump have a way of making us feel suddenly rich. But don’t celebrate yet.

Yevgenia Nayberg

This article is featured in the Nov. 23 issue of the Magazine.

Promising news for people on my holiday list: I may be in the mood to drop more cash on presents this year. No, I didn’t come across my name on an unclaimed-money list or sell a bunch of Apple stock. I’ve simply been pumping gas into my Honda Civic.

With gasoline prices at their lowest levels in years, a fill-up now costs me about $8 less than it did at the start of summer. That’s $40 a month I’m not burning during my crawl of a commute up Route 3. The modest windfall comes from a combination of weakening demand for oil, increased US crude production, and other factors only an energy analyst could get revved up about. Nationwide, it’s adding up quickly. The average price of a gallon of gas recently dipped below $3, and GasBuddy.com estimated the savings for Americans at nearly $110 million a day compared with the same period in 2013. Some of those who obsessively follow gas prices say that’s enough to trigger increased discretionary spending in December, a month during which retailers count on people to show little or no discretion.

“Consumers are experiencing ‘sticker delight,’ ” AAA chief executive Bob Darbelnet said in a press release celebrating the $3 benchmark. “Lower gas prices are a boon to the economy, just in time for holiday travel and shopping.”

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Well, maybe. Quantifying that economic boost on a grand scale is difficult if not impossible. Top-tier earners aren’t going to change their spending habits because of slightly plumper bank statements. Those of more modest means will probably steer any extra dollars toward family budget busters like housing, food, and electricity. Rents are at all-time highs in the Boston area, and pushing a cart through the supermarket aisles is an experience in nonstop sticker shock. Peppers at the local Stop & Shop have become so expensive I’m expecting them to soon be displayed in a glass case under lock and key. National Grid customers will face 37 percent higher electric bills this winter, compared with last, and NStar increases are expected to be not far behind.

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Meantime, paychecks remain frozen in the past. The average hourly wage for US workers in October was $24.57, a lousy 2 percent increase from 12 months earlier, and barely enough to keep pace with the country’s 1.7 percent inflation rate. That kind of math doesn’t equal “disposable” income.

I don’t mean to sound like a Scrooge, or a Federal Reserve board member — lower-priced gas does make drivers happier. In fact, Mary Maguire of AAA Southern New England sounded downright giddy when I asked her about the slide. “It’s uplifting, it really is,” she said. “There are very few prices that we’ve seen drop as dramatically as gas. It’s cause for celebration.”

She could be on to something with this gas-party thing. Doling out more or less money at the corner self-serve station is just one reason why consumers devote so much attention to gas-price fluctuations. There’s psychology involved, too. When numbers at the pumps go down, people tend to conclude broader financial markets must be looking up. That, in turn, makes them feel less nervous about their standing in this slow-boil economy, and perhaps more inclined to pull out a credit card or two than they were in January. Consumer confidence doesn’t easily translate into facts and figures, but it’s weirdly contagious.

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There’s also something about the hunt for the cheapest gas in town that gets drivers jazzed. Drivers like Mary Maguire. “It becomes kind of a fun game that you play with yourself,” she says. Television stations — and sometimes big-city daily newspapers — send reporters out to capture the reactions of delighted customers who offer such insights as “I like it.”

That’s the beauty of gas prices as a monetary measurement: They go up, they go down, and the numbers are conveniently posted on signs along roadways. The concept doesn’t require a degree from Harvard Business School to sort out. Most people — business editors included — are averse to discussions of more complex economic indicators. We know they somehow affect our daily lives, but Gross Domestic Product? Gross! When it comes to gas, however, anyone who has ever clutched a nozzle is an expert.

Then there’s the “this is happening right now” element. Where else can you watch a digital readout of your personal spending, penny by penny, in real time? Imagine if restaurant tables were outfitted with displays that priced food by the bite. (“I’m only halfway through this pork loin, and it’s already cost $17.50. We’re going to have to split dessert.”)

Sorry, I’m getting carried away. (You’re right, Mary, this subject is uplifting!) I’m old enough to remember $4 a gallon in Massachusetts — July 2008. Prices will almost certainly get there again. They can be rocketed upward by anything from a hurricane to a distant political crisis to worries over a deadly virus.

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Before that happens, I need to attend to immediate business — Christmas shopping for friends and family. A gift should be infused with meaning; it is a token of love, a symbol of affection that shows an intimate understanding of the recipient’s desires.

This season, I’m thinking gas cards for everyone.

Related coverage:

- Gas prices continue to drop, hit $2.93 a gallon

- Mass. residents enjoy benefits of low gas prices

- Jeff Jacoby: Do something about gas prices? Why?

- More from the Magazine


Mark Pothier is the Globe’s business editor. E-mail him at mark.pothier@globe.com and follow him on Twitter @markpothier.