When gas prices go up, wouldn’t it be nice to

know that car manufacturers are trying to

stretch your dollar at the pump?

Fuel Efficiency vs. Gas Prices

From the 1900s to the 2000s

►28147-TMTH3360-APPLIED TECHNICAL STATISTICS

►INSTRUCTOR: SUSAN SCHROEDER;

►GROUP MEMBERS:

►TIA NEEDOM

►JARED BRIDWELL

►SHERRY RODRIGUEZ

►HAMISI KHALFANI
OUTLINES

► Introduction (Hamisi Khalfani)

► Hypothesis (Sherry Rodriguez)
► Research and Data Collection (Tia Needom)
► Graphs and Charts from collected data (Jared Bridwell)
► Background information and questions (Sherry Rodriguez)
► Analysis and summarized conclusion (Hamisi Khalfani)
INTRODUCTION

► Fuel efficiency the ratio from effort to result of a process that

converts chemical potential energy contained in a carrier into
kinetic energy or work specifically for motor vehicles in the topic
that we will discuss.
► Gas prices, are costs of fuel depending on the demand of the area
and the number of users in that specific area. Worldwide gas prices
are controlled by OPEC countries and in some ways by the United
States of America and Russia.
HYPOTHESIS

► Are fuel efficiency motor vehicles a reason for fluctuation in gas

prices?
► Will a more fuel efficiency motor vehicles required less gas and
hence less costs of gas to the end users?
► Are the gas prices increase and decrease affected by motor
vehicles usage of gas or not?
► Hypothesis – As the years go by the fuel efficiency will increase and
so will the gas prices, but the gas prices will hit a point and start
decreasing.
► Null – Fuel Efficiency has a positive correlation with gas prices.
► Alternative – Fuel Efficiency has a negative correlation with gas prices.
Background

► Gasoline is the bloodline that keeps America moving, and tracking gas prices can
feel like a roller coaster ride. They're down a little one month, up the next, and
then they shoot up more than 50 percent in a year. Plus, they're different
depending on where you look. Other countries -- and even other states and cities
-- can have very different gas prices from your local Gas-N-Go. To the average
person, it probably seems as though there's little rhyme or reason to how gas
prices are determined. In this article, we will look at the forces that impact the
price of gas at the pump, and we'll find out where your gas money actually goes.
(1)
► Back in 2011 President Obama announced historic 54.5 mpg fuel efficiency
standard, saving consumers $1.7 trillion at the pump, and $8k per vehicle by 2025.
“The President was joined by Ford, GM, Chrysler, BMW, Honda, Hyundai,
Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo – which
together account for over 90% of all vehicles sold in the United States – as well as
the United Auto Workers (UAW), and the State of California, who were integral to
developing this agreement.”(2)
FUEL EFFIENCY AND GAS PRICES
Gas Prices:
At least 3/4 of the 63 measurments lie in the interval .41 to
4.04

At least 8/9 of the 63 measurments lie in the interval 0 to

4.95
1st Quartile = 1.385

2nd Quartile
= 2.27
3rd Quartile = 3.025

Interquartile
Range = 1.64

Lower Fence
= -1.075

Upper Fence
= 5.485
Fuel Efficiency:
At least 3/4 of the 63 measurments lie in the interval 25.3 to 38.2
At least 8/9 of the 63 measurments lie in the interval 22 to 41.5
1st Quartile = 29

2nd Quartile
= 30.3
3rd Quartile = 34.8

Interquartile
Range = 5.8

Lower Fence
= 20.3

Upper Fence
= 43.5
 Gas Prices Fuel Efficiency

Mean 2.224 Mean 31.7460317

Standard Error 0.20313387 Standard Error 0.40836006
Median 2.205 Median 30.3
Mode 1.2 Mode 28.7
Standard Deviation 0.90844228 Standard Deviation 3.24125749
Sample Variance 0.82526737 Sample Variance 10.5057501
Kurtosis -1.4726581 Kurtosis -1.08652
Skewness 0.22738776 Skewness 0.63368996
Range 2.59 Range 10.4
Minimum 1.03 Minimum 27.8
Maximum 3.62 Maximum 38.2
Sum 44.48 Sum 2000
Count 20 Count 63
1.3633E-94 1.3633E-94
Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Average U.S. $1.20 $1.20 $1.03 $1.14 $1.48 $1.42 $1.35 $1.56 $1.85 $2.27 $2.57 $2.80 $3.25 $2.35 $2.78 $3.52 $3.62 $3.51 $3.36 $2.43 $2.14 $2.23
Gas Prices

Passenger Car 28.5 28.7 28.8 28.3 28.5 28.8 29.0 29.5 29.5 30.3 30.1 31.2 31.5 32.9 33.9 33.1 35.3 36.4 36.5 37.2 37.7

Domestic 28.1 27.8 28.6 28.0 28.7 28.7 29.1 29.1 29.9 30.5 30.3 30.6 31.2 32.1 33.1 32.7 34.8 36.1 36.3 37.2 37.3 27.8

Imported 29.6 30.1 29.2 29.0 28.3 29.0 28.8 29.9 28.7 29.9 29.7 32.2 31.8 33.8 35.2 33.7 36.0 36.8 36.9 37.3 38.2 38.2

Average 28.7 28.9 28.9 28.4 28.5 28.8 29.0 29.5 29.4 30.2 30.0 31.3 31.5 32.9 34.1 33.2 35.4 36.4 36.6 37.2 37.7
Vehicle MPG

Highest 29.6 30.1 29.2 29.0 28.7 29.0 29.1 29.9 29.9 30.5 30.3 32.2 31.8 33.8 35.2 33.7 36.0 36.8 36.9 37.3 38.2

Passenger Car Domestic Car Imported Car

U.S. gas prices have been slowly rising over the years. There are have been dips at points, but it has always gone
back up. Due to this, I would predict that the average gas prices would rise again post 2016, as it did back in 2009.
The chart above shows a comparison of the average mpg of passenger cars, domestic cars, and imported cars.
Imported cars beat out the others in mpg sixteen out of the twenty years shown.
The three charts shown above show a positive
trend in miles per gallon across the board as years
pass.
The chart above shows a positive correlation between average vehicle fuel efficiency and average gas prices. There are
small exceptions when events suddenly impact gas prices, particularly in 2015 and 2016, but overall, it's consistent.
Conclusion
In conclusion, with the amount of money that consumers spend on vehicles and gas, it is
reassuring that car manufacturers are improving fuel efficiency. As shown from our graphs, fuel
efficiency has steadily increased. In our comparisons of passenger, domestic and imported vehicles on
mpg’s, we can see that imported vehicles offer better fuel efficiency. From our “Vehicle Fuel efficiency”
chart shows that the passenger, domestic and imported vehicles are steadily increasing over the years.
It is often asserted that gasoline costs are not fully important to automobile consumers when they
choose between automobiles with different fuel economy ratings. If this is true, consumers buy vehicles
with lower fuel economy and higher resulting fuel costs than they would in their private optima. In 2007,
the median-income American household spent $2400 on gasoline, and consumers spent $286 billion in
total. The purported undervaluation of future gasoline costs would also help explain what Jaffe and
Stavins (1994) call the "Energy Paradox": consumers and firms are puzzlingly slow to make seemingly
high-return investments in energy efficiency.(8) While electric cars are becoming more prominent in the
market and are contributing to the overall gain in the overall efficiency of the U.S. fleet, the efficiencies
of gasoline powered cars have been improving because of market forces, but also largely because of
regulation. The Corporate Average Fuel Economy (CAFE) standards were first set by Congress in 1975
(as a response to the 1973 oil embargo) and have been the chief driver of the improving fuel economy
of cars on the road. While a portion of the customer base is clamoring for these improvements,
regulations have really been the driving force to improving fuel efficiency and thus letting drivers get
more bang for their buck at the gas pump.(7)
CITATIONS
1) Gramlich, Jacob. "Gas prices, fuel efficiency, and endogenous product choice in the US automobile industry."
Unpublished Working Paper (2010).

2) Turrentine, Thomas S., and Kenneth S. Kurani. "Car buyers and fuel economy?." Energy policy 35.2 (2007): 1213-
1223.

3) Anderson, Soren T., et al. "Automobile fuel economy standards: Impacts, efficiency, and alternatives." Review of
Environmental Economics and Policy 5.1 (2011): 89-108.

4) Bezdek, Roger H., Robert M. Wendling, and Roger H. Bezdec. "Fuel Efficiency and the Economy: Input-output
analysis shows how proposed changes to automotive fuel-efficiency standards would propagate through the
economy." American Scientist 93.2 (2005): 132-139.

5) Bonsor, Kevin, and Ed Grabianowski. “How Gas Prices Work.” HowStuffWorks, HowStuffWorks, 5 June 2001,
https://auto.howstuffworks.com/fuel-efficiency/fuel-consumption/gas-price.htm.

6) “President Obama Announces Historic 54.5 Mpg Fuel Efficiency Standard.” National Archives and Records
Administration, National Archives and Records Administration, 29 July 2011,
https://obamawhitehouse.archives.gov/the-press-office/2011/07/29/president-obama-announces-historic-545-mpg-
fuel-efficiency-standard.

7) Chester, Matt. “Road Tripping Through Time: Tracking Gas Prices and Fuel Efficiency of Cars to Determine What
Era of American Drivers Got the Most Bang for Their Buck.” Chester Energy and Policy, 8 May 2018,
http://chesterenergyandpolicy.com/2018/05/07/road-tripping-through-time-tracking-gas-prices-and-fuel-efficiency-
of-cars-to-determine-what-era-of-american-drivers-got-the-most-bang-for-their-buck/.

8) Allcott, Hunt, and Nathan Wozny. “Gasoline Prices, Fuel Economy, and the Energy Paradox.” E2e Working
Paper 002, E2e , Nov. 2012, http://e2e.haas.berkeley.edu/pdf/workingpapers/WP002.pdf.
CITATIONS

13) Gramlich, Jacob. "Gas prices, fuel efficiency, and endogenous product choice in the US automobile industry."
Unpublished Working Paper (2010).

14) Turrentine, Thomas S., and Kenneth S. Kurani. "Car buyers and fuel economy?." Energy policy 35.2 (2007): 1213-
1223.
15) Anderson, Soren T., et al. "Automobile fuel economy standards: Impacts, efficiency, and alternatives." Review
of Environmental Economics and Policy 5.1 (2011): 89-108.

16) Bezdek, Roger H., Robert M. Wendling, and Roger H. Bezdec. "Fuel Efficiency and the Economy: Input-output
analysis shows how proposed changes to automotive fuel-efficiency standards would propagate through the
economy." American Scientist 93.2 (2005): 132-139.