The Elasticity of Gas Prices #
July 29th, 2008 | In Worth Knowing
The reality of the price at the pump against the price of a barrel:
Analyses of gasoline economics show that when the price of oil rises, it takes up to four weeks for gas station prices to catch up, with most of the increase taking place within the first two weeks. But when oil prices sink, it takes up to eight weeks for the savings to be passed along to consumers. The phenomenon is known as “asymmetric price adjustment” (PDF) or, more informally, “rockets and feathers.”