Photo (cc) by 401(K) 2013
A penny saved is a penny spent, at least when it comes to the money Americans’ saved at the gas pump this year.
A new report from the J.P. Morgan Chase Institute found that cheaper gas prices over the past year, which led to pump savings of $360 for the average American driver, did in fact fuel spending elsewhere by Americans.
This contradicts earlier research that suggested that Americans were pocketing their gas savings.
“Consumers report that they are using their gains at the pump to pay down debts and save. Our data show they are spending most of them,” said the report, which analyzed the spending patterns of 25 million credit and debit card users.
Diana Farrell, president and CEO of the institute, told The Washington Post that the findings of the report weren’t all that surprising.
“That’s just classic behavioral science,” she said in an interview. “People respond (to surveys) with what they intend to do, with what they hope to do, and not what they are doing. … They’re spending the money”
According to the report, Americans spent about 80 cents of each dollar saved at the pump. Restaurants benefited the most, eating up about 20 percent of the overall gas savings. But Americans also spent their gas savings at grocery stores, department stores, and on entertainment, electronics and appliances, the report found.
Some people have gained more than others from the drop in gas prices. Drivers in the South and Midwest saw the largest decline in gas spending because they traditionally spend more on gas than other regions. Lower-income Americans and younger Americans also benefited more because they spend a larger portion of their income on gas.
The average price of a gallon of gas today is $2.32, compared to $3.27 a year ago, according to AAA.
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