After the Storms: Anticipated Effects of Gasoline Prices on Health Behaviors and Health-Related Consumption
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Matthew M. Davis, MD, MAPP
University of Michigan
Home page: http://www.fordschool.umich.edu/faculty/Matthew_Davis
University of Michigan
Sample size: 1060
Field period: 06/14/2006 - 06/21/2006
Prior to Hurricane Katrina, consumers were spending about 3% of their disposable income on oil and gasoline, compared to 20% on medical care, 13% on food, and 8% on recreation. Before Hurricane Katrina struck, the California Energy Commission compared gasoline sales for the first four months of 2004 with sales from the first four months of 2005 – a period during which gasoline prices were steadily 17% higher than the year before – and found that gasoline sales had dropped only roughly 0.5%. These data suggest some small degree of decreased consumption (perhaps indicating greater use of public transportation, walking, or bicycling), but suggest more strongly that U.S. demand for gasoline is quite elastic, which in turn – assuming a consistent income constraint for the average U.S. consumer – necessitates that consumption of other goods must decrease.
Of what goods will consumption decrease? With medical care costs already a large component of personal spending and health care expenditures rising quickly, at near-double-digit rates each year, our research goal is to examine how consumers expect to change their consumption patterns of gasoline and health care, as well as how they expect to change their health-related behaviors. For example, a person who drives less to save gas and money could carpool (likely little or no health effect) or could bicycle (likely positive health effects). On the other hand, a person who expects not to change their driving patterns out of necessity may be forced to make difficult decisions about health care consumption (e.g., decreased consumption of prescribed brand-name pharmaceuticals). Given pressures of higher gas prices and the expense of health care today, our primary hypothesis is that consumers will pursue health behaviors and health care-seeking behaviors that they expect will save money. As a corollary, chronic health conditions for some individuals may make it hazardous for some to alter their consumption of health care, and therefore they may decide to limit gas consumption. Another health-related corollary is that obesity may make it difficult for some individuals to change either their gas consumption (because walking and taking public transportation are too difficult) or their health care consumption (because of obesity-related conditions such as diabetes and heart disease), and therefore obese individuals may be expected to change other consumption behavior patterns besides gas and health care.
We therefore propose to investigate how gasoline prices will affect anticipated consumer spending, health behaviors, and decisions about health care.
(1)The rising price of gasoline, since September 2005, will have motivated some respondents to change consumption behavior(s) or to at least contemplate changing behavior(s).
(2)Respondents will be more likely to adopt health behavior changes if they are exposed to the prediction that gasoline prices will rise to on average to $4.00 per gallon in 2006, versus those respondents who are exposed to predictions of lower prices in 2006 or no condition.
(3)Respondents with chronic health conditions will be more likely to reduce gasoline consumption because they cannot afford to reduce their health care expenditures.
(4) Obese respondents (as defined by body mass index >30 kg/m2) will be less likely to change health and gasoline behaviors than non-obese respondents.
(5)Families with children will have less elastic gasoline consumption, and so will be more likely to reduce health care costs and decrease unhealthy behaviors than families without children.
The stratified sample will be block-randomized into 3 groups: Group A with 400 respondents, Group B with 400 respondents, and Group C with 400 respondents; each group will be split evenly among households with and without minor children. The three groups will then receive one of three stimuli. Stimulus A provides no information. Stimulus B is a news story designed by the investigators regarding the price of gasoline, including a graph and an expert analyst’s prediction that future gasoline prices will be on average $3.00 per gallon through the end of 2006. Stimulus C is a similar hypothetical news story with an expert analyst’s testimonial, but future gasoline prices are predicted to be on average $4.00 per gallon through the end of 2006.Key Dependent Variables:
We have developed a series of queries (see Appendix A) designed to address our study hypotheses by measuring respondent’s intentions for behavior change regarding driving, physical activity, tobacco consumption, fast food consumption, medications, health insurance, and health care.