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AMES, Iowa -- Gasoline prices threatening to top $4.00 a gallon in Iowa are likely to change spending habits.
"If you have to put gas in your tank to get to work, that's just the way it is--and if it means less money at the end of the month, everything suffers," says Iowa State University economist Dave Swenson.
He says the longer high gas prices persist, the more it could increase household debt as people use credit cards to cover growing costs for necessary spending on things like energy and food.
"Right now, they're getting hit from all directions at once--from general inflation, they're also getting hit with these gas prices which are going to wrap around and increase prices on a wide range of other products we need every day," Swenson says.
He also says the longer gas prices stay high, the more likely people are to change their behavior.
"Over the short of time they're not going to have much effect, but over a longer period of time they are going to have an effect that may induce more people to reconsider different kinds of automobiles--either gas-electric hybrids or electric vehicles," Swenson says.
He says the longer gas prices stay high more people may be prompted to carpool, or to do what they did at the height of the COVID pandemic and work more from home.
Triple A says Iowa gas prices averaged $3.89 a gallon on Wednesday, while the national average is $4.25.