Drinking and Driving and Inflation

Teenagers' tendency to drink and drive in the summertime has waned over the years, thanks to education and crackdowns.

Another factor this year is cost. Not only is gasoline hovering near $4 a gallon around the country, but beer prices, pressured by rising costs of hops and barley, are up more 4 percent from a year ago.

Still the surge in prices at the pump -- up nearly 40 percent this year -- has clearly outpaced beer inflation.

Mark Thoma, an economist at the University of Oregon, has mused on the trade-off between buying gas and buying beer:

"If someone had an allowance of $5 per week back then and purchased two six-packs and 10 gallons of gas, then they would need $51 to purchase the same basket of goods (or bads) today. Since this was 36 years ago, that works out to inflation of 6.7 percent per year."

But the inflation rate for just gasoline works out to 8 percent since 1972. The teenager "who spent all $5 on beer and didn't drive at all, would only need $22 today to get the same amount of beer. That's an inflation rate of 4.1 percent."

"Given the shift in relative prices, kids today should be tempted to drink more, and drive less."

by Jeffrey Cane