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Gasoline Prices - Research Paper Example

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It is a basic principle of economics that if the demand increases, the price will rise. In the gasoline market this is seen during the summer months, when families plan vacations and the demand for fuel rises (Gasoline Prices). It is again seen in the winter as the demand for home heating fuel creates anther increase in price (Gasoline Prices)…
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Gasoline Prices Research Paper
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Gasoline Prices

I hypothesize that bright sunny weather causes gas prices to increase.
To conduct this study, data was gathered from the Seattle Queen Ann weather station available from the Weather Underground. The solar data that was used was the peak amount of solar energy during the day, which was used as an indicator of whether the day was sunny or cloudy. Gasoline prices were taken from Seattle Gas Prices, a web site that monitors and records the daily price of gas in Seattle. For this study, a two-month period from November 15, 2008 to January 15, 2009 was used. The two variables were plotted using Microsoft Excel and is presented in a graph as Figure 1. A logarithmic trend line was used on the solar energy variable to average out the swings in the data. If the hypothesis is true, the trend line for gas prices should follow the trend line for solar energy.
As can be seen in Figure 1, the relative gas price generally follows the logarithmic daily solar energy line from mid November to January 1, 2009. During the first week of January, there is some divergence, and the hypothesis does not hold true during this period. However, during the second week of January both the solar energy and the gas prices level out and again begin to prove the hypothesis true. ... Read More
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