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JOURNAL OF APPLIED BUSINESS AND ECONOMICS
Changes in Gasoline Prices and Consumer Sentiment
Author(s): Mark A. Johnson, Douglas J. Lamdin
Citation: Mark A. Johnson, Douglas J. Lamdin, (2012) "Changes in Gasoline Prices and Consumer Sentiment," Vol. 13, Iss. 4, pp. 43-51
Article Type: Research paper
Publisher: North American Business Press
Abstract:
Volatile gasoline prices are frequently mentioned in the press. Using more than thirty years of consumer
sentiment data, we analyze the relationship between changes in gasoline prices and its impact on
consumer sentiment. We find a negative relationship between changes in gasoline prices and changes in
consumer sentiment, suggesting that as gasoline prices rise (fall), this negatively (positively) impacts
consumer sentiment. Additionally, causality analysis provides support that changes in gasoline prices
leads consumer sentiment and changes in consumer sentiment. Our results are consistent with the
documented fact that the demand for gasoline by consumers is inelastic in the short-run.
