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In this issue of Math in the News, we analyze data on the price of gasoline.
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The Rising Price of Gasoline
This graph shows the average price of gasoline from 1990 to 2/20/12. This is a large data set that you can download from this site:
http://www.eia.gov/petroleum/gasdiesel/
The Rising Price of Gasoline
Notice that there was a previous spike in the price of gasoline in 2008, which led to a steep drop in price. Currently, we are on the upswing in price since that downward spike.
The Rising Price of Gasoline
There is an overall linear regression that could be performed on this large data set. But such a linear model would not capture some of the near-term changes in price.
The Rising Price of Gasoline
Instead, it makes more sense to look at a linear regression for this part of the overall data set.
The Rising Price of Gasoline
Here is the graph of this portion of the data, which covers the period from 2008 (when the gas dipped to its lowest) to the present.
The Rising Price of Gasoline
This will result in a better line of best fit.
The Rising Price of Gasoline
Running a linear regression on this data set results in this equation for the line of best fit.
The Rising Price of Gasoline
Using the equation, we can find the estimated time when the price of gasoline will, on average, be $5.
The Rising Price of Gasoline
According to this regression, it would take till 2015 for that to happen. But given current pricing trends, that date is too far off.
The Rising Price of Gasoline
The most recent data shows a bigger spike than the overall trend. This portion of the data takes us to 2010, and perhaps a linear regression on this portion of the data will yield a better estimate.
The Rising Price of Gasoline
The newer regression curve does, indeed, show gas approaching $5 at a faster rate.
The Rising Price of Gasoline
With this regression curve, the price of gasoline will reach $5 by the end of this year, into early 2013.
The Rising Price of Gasoline
When do you think the price of gas will reach $5 per gallon in your area? When do you think the average for the country will be $5 per gallon?
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