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The psychology of gas prices

Here’s another take on the ups and downs of gas prices and how they might affect summer travel, coming after the price of a gallon of gas in Miami dropped 23 cents in the last three weeks. Some people make transportation choices that are more psychological than financial, my colleague Adam Beasley reports. He cites a study published in the Journal of Behavioral Decision Making, in which one group of participants who were planning a 500-mile road trip were told that gas prices had spiked overnight by $1. A significant number of those people said they’d cancel the trip. The second group was told that an increase in gas prices would cost them an extra $25 each way. Few in the second group said they’d cancel their trip. The bottom line in both cases was the same, only the numbers were expressed differently. Read Adam’s article here.