Students create a graph to illustrate the historical actual price vs. the inflation-adjusted price of a gallon of gasoline.
Students
graph, chart, table, gasoline, inflation, actual cost
When gas prices are adjusted for inflation, a gallon's actual cost today may be not much more than it was years ago.
For example, back in 1980, a gallon of gas cost about $1.13.
More recently, in early 2012 a gallon of gas cost an average of $3.80.
When the rate of inflation is figured in, however, the cost of a gallon of gas in 1980 was actually $3.12 (in 2012 dollars). So in 2012 gas prices are only about 68 cents higher than they were in 1980.
You can use an online inflation calculator to verify that.
Note: Different inflation calculators might vary in the results they present. The results will depend upon the data that supports them. If you calculate the adjusted-for-inflation value in 2012 of $1.13 in 1980, results on the calculator above might vary slightly from those presented by calculator 2 or calculator 3.
Introduce to students the data below, which shows the average price of a gallon of gasoline from 1950 to 2005.
YEAR | PRICE PER GALLON |
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 |
.27 .30 .31 .31 .35 .53 1.13 1.19 1.13 1.14 1.66 2.10 |
Also see figures from 2006 and later (students will need to select the "show past 6 years" option and then average 4 or 5 data points for each year to come with an annual average price for a gallon of gas).
If you have access to computers or a computer lab, let students use one of the inflation calculators above to calculate the inflation-adjusted cost (value compared to the current value of the dollar) of a gallon of gasoline. Create a chart to show that. Depending on the calculator you use, the results should look something like this:
YEAR | PRICE PER GALLON | INFLATION-ADJUSTED PRICE |
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 |
.27 .30 .31 .31 .35 .53 1.13 1.19 1.13 1.14 1.66 2.10 |
2.19 2.19 2.05 1.92 1.76 1.92 2.68 2.16 1.69 1.46 1.88 2.10 |
Also see historical information on inflation-adjusted gas prices that includes data from more recent years.
Now it's time for students to graph their results.
Note: If you teach upper elementary or middle school students, you might collect and plot fewer points of data than if you teach high school students.
Provide students with a sheet of graph paper. You might have set up a sheet for them for this activity, or they might set it up on their own.
The resulting graphs (which will look something like a less-detailed version of this one) will give student a visual representation of the price of gasoline over the years. They will see from the graph that while the actual price of a gallon of gasoline has increased, the cost of a gasoline adjusted for inflation has not increased as steadily. Bottom line, people today are not necessarily using more of their weekly paycheck to pay for gasoline than they might have used 40 years ago.
Have students write in their journals a brief explanation of what they learned from doing this activity.
EducationWorld.com
Gary Hopkins
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NM-NUM.6-8.1 Understand Numbers, Ways of Representing Numbers, Relationships Among Numbers, and Number Systems
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NM-ALG.6-8.3 Use Mathematical Models to Represent and Understand Quantitative Relationships
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GRADES Pre-K - 12
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Last updated 03/17/2012