The Cost of Commuting: 500GD/M

SAR asks:

Is there a simple formula that combines the price of gasoline, the one-way commute in miles, and per-hour wages that will let those in the exurbs (and soon, suburbs) figure out when it's time to move back to the city?

Sure. Let G be the price of gas, M be the mileage you get on your car, D be the one-way commute in miles, R be your current annual rent (or mortgage payment), and C be the annual rent (or mortgage payment) in the city.

Then the annual savings of moving to the city, assuming 500 one-way commutes per year and zero commuting costs in the city (this is admittedly rough-and-ready), would be 500GD/M+R-C. When that number turns positive, it's time to do something: if not move to the city, then maybe start carpooling, or find a more fuel-efficient car, or persuade your employer to switch to four 10-hour days rather than five 8-hour days.

Plugging in some typical numbers, let's say G is $4.11 a gallon, M is 20mpg, and D is a 35-mile commute. Then the cost of commuting, 500GD/M, is $3,600 per year, or $300 a month. If you manage to increase your mileage to 30mpg, it goes down to $2,400, or about $200 a month. For people earning $10 an hour, $300 per month is 30 hours' work, assuming zero net taxes.

Of course, communting was never free: if the cost of gas has doubled, then the extra cost of commuting might have gone up by "only" $150 a month. But it's still a large burden for working-class families to bear.

Update: Ironman transforms this into a plug-in-the-numbers dynamic calculator! Brilliant stuff.

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