EVALUATING THE COSTS AND BENEFITS OF PLANS TO REDUCE GASOLINES QUEUES

The costs in terms of service station queuing of contingency plans designed to reduce gasoline demand during a shortfall in petroleum supply are analyzed. Queues are recongnized a response to market disequilibrium that will grow until the cost per gallon of queuing fills the gap between the equilibrium price and the price charged at the pump. The cost of queuing can thus be inferred from this price differential; the reduction in total queuing costs represents the benefits produced by the contingency plan. Benefits and costs of a contingency plan are measured relative to the alternative of rationing by queuing. The value of these benefits is measured for three such plans and compared with rough estimates of the costs of achieving them. Costs include the losses in consumer surplus caused by a plan and the expenses of implementing a plan. An economic model of the retail gasoline market is presented graphically to describe the theory that underlies the analysis. An important inference that can be drawn from the analysis is that, when more-efficient policies are precluded, restrictions on consumption may be designed that will yield benefits in excess of costs. The three plans analyzed in this paper are an employer-based plan to encourage more energy-efficient commuting travel, a sticker plan to require each household to give up use of all of its cars on a selected day of the week, and a ban on weekend use of off-road recreational vehicles, private boats, and aircraft. Estimates are based on data from secondary sources and a set of assumptions that include a 7 percent shortfall in the supply of gasoline in 1981. Benefits from all three plans are found to exceed their costs. (Authors)

Media Info

  • Media Type: Print
  • Features: Figures; Photos;
  • Pagination: pp 26-32
  • Monograph Title: Transportation energy: data, forecasting, policy and models
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00331026
  • Record Type: Publication
  • ISBN: 0309031079
  • Files: TRIS, TRB
  • Created Date: Jun 12 1981 12:00AM