May 17, 2015

One Guy on Your Head on Gas Prices and the Fickle Consumer

UT psychology professor Art Markman says consumers are motivated by short-term issues and don't think about the long-term consequences of their buying decisions

UT psychology professor Art Markman says consumers are motivated by short-term issues and don’t think about the long-term consequences of their buying decisions. Photo by Hilary Pearson/Reporting Texas

By Ryan Fite
For Reporting Texas

With May gas prices $1.04 cheaper a gallon in Texas than this time last year, and at a low ebb nationwide since fall of 2014, consumers have been buying up SUVs and other gas-hungry vehicles. Can you fault them? Reporting Texas’ Ryan Fite asked Art Markman, a professor of psychology at the University of Texas at Austin, to help explain the quirks embedded in consumer behavior.

Markman is also the co-host of “Two Guys On Your Head,” a popular weekly radio show on KUT, Austin’s NPR affiliate. Markman and his co-host, UT professor Bob Duke, discuss everyday psychology, from “Why Creative Minds Think Alike” to “How to Deal with Jerks.”

Herewith a sampling of Markman’s views on what fuels our buying habits:

On choosing between short-term and long-term bliss:

Human beings have difficulty whenever they have to manage a tradeoff between something that feels good in the short term and something that feels good in the long term. Anything that has its benefit primarily in the long term will often suffer when it’s easier to do something else in the short term.

If it feels like it’s easy to burn fossil fuels and drive cars that have worse gas mileage, if that’s not painful for us in the present, then we’re not really going to be that driven to do the thing that feels right for us in the long run.

On what drives car buying:

You might think for a decision that’s a much bigger one, like [buying] a car, that somehow longer-term information would end up affecting the way that you feel about that purchase. … You fill up your gas tank [and] it costs you $60. You think it’s always going to be like that, so [you think] I’ve got to be much more fuel-efficient. What’s happening now is that people are  thinking gas is cheap so I can fill my tank for $30, so now it feels like I can buy a car with worse mileage. In a lot of ways, we tend to take this kind of short-term view in a lot of our choices.

On how our minds function before the point-of-sale:

One of the things about the car-buying decision is that consumers have to do a lot more decision-making before they get to the point of sale than they do for a lot of other decisions. … If you want to buy peanut butter, you don’t necessarily have to decide what peanut butter you want to get before you go to the supermarket. You go to the supermarket, you stand in front of the wall of peanut butter and at that point you can figure out what you might want. [In] the car-buying decision, you have to make a lot of decisions about a type of car and things like that, because that’s going to determine where you shop.

Now, one of the things that is common between, say, peanut butter and buying cars that we don’t necessarily realize is that, in both kinds of decisions, some of the things about how you feel in that moment may be influencing the choice. So you stand in front of that wall of peanut butter and if you suddenly feel [you] really like crunchy peanut butter, then that could influence which type of peanut butter you might end up buying … even though the next day when you go to use the peanut butter, you might wish you had bought creamy instead of chunky.

On making more astute buying decisions:

It’s important for us to think about the timescale. … The more that our choices have long-term implications, the more we ought to pay attention to that.

And with gas prices, there are two things that are interesting. One of them is chances are gas will be cheap for a year [and] then conditions will change and prices will go back up. Even if a lifetime of owning a particular vehicle, it’s probably going to be pretty expensive to fill that gas tank in the future.

If we really want to take the long-term view, at some point we’re  going to have to do things that do help the environment. That’s going to require a concerted effort of a lot of people. It would certainly be helpful if we could find ways to increase some of the taxes on gas to keep a minimum price for gas that might make it harder for people to want to drive gas-guzzling cars.