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Replicating economic research…on gasoline affordability

Summary:
[embedded content] Here at the FRED Blog, we believe it’s important to be able to replicate economic analysis, which begins by identifying the data used in that analysis. That’s why FRED Blog posts include a list of the data series used to build the graphs. Moreover, all FRED data series themselves include a suggested citation. The FRED graph above can help us reproduce some research published in our Economic Synopses series: “Gasoline Affordability.” The essay, published in 2004, compares wages with gasoline prices. To replicate the analysis, we searched for the two series mentioned in the essay: the CPI index for the price of gasoline and the average hourly wage rate of production workers. [embedded content] The second FRED graph helps us test the robustness of the analysis by

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Here at the FRED Blog, we believe it’s important to be able to replicate economic analysis, which begins by identifying the data used in that analysis. That’s why FRED Blog posts include a list of the data series used to build the graphs. Moreover, all FRED data series themselves include a suggested citation.

The FRED graph above can help us reproduce some research published in our Economic Synopses series: “Gasoline Affordability.” The essay, published in 2004, compares wages with gasoline prices. To replicate the analysis, we searched for the two series mentioned in the essay: the CPI index for the price of gasoline and the average hourly wage rate of production workers.

The second FRED graph helps us test the robustness of the analysis by extending its conclusion about gasoline affordability and demand for SUVs past the original publication date. (Again, it was published in 2004.)

Between 2004 and 2009, when gasoline became gradually less affordable, the sales of lightweight trucks decreased. Nevertheless, despite the fact that gasoline was unevenly affordable between 2010 and 2020, the sales of lightweight trucks grew at a steady rate. Something other than gas prices must be driving demand for SUVs.

To learn more about auto sales, read Bill Dupor’s Economic Synopses essay “Auto Sales and the 2007-09 Recession.”

How this graph was created: Search for and select “Consumer Price Index for All Urban Consumers: Gasoline (All Types) in U.S. City Average.” From the “Edit Graph” panel, use the “Edit Line 1” tab to customize the data by searching for and selecting “Average Hourly Earnings of Production and Nonsupervisory Employees, Total Private.” Next, create a custom formula to combine the series by typing “a/b” and clicking on “Apply.” Next, use the “Add Line” tab to create a user-defined line. Create a line with start and end values of 10. Last, use the “Add Line” tab to search for “Motor Vehicle Retail Sales: Light Weight Trucks” and click on “Add data series.” To change the line colors, use the choices in the “Format” tab.

Suggested by Diego Mendez-Carbajo.

About FRED Blog
FRED Blog
The Federal Reserve Bank of St. Louis is the center of the Eighth District of the Federal Reserve System. This District includes Arkansas, eastern Missouri, southern Illinois and Indiana, western Kentucky and Tennessee, and northern Mississippi.

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