After days of research and several hundred calculations, I pulled together the following observations.
Direct oil costs for heat and vehicle fuels (HFI) consumed by our hypothetical family, will increase by an estimated $1,113 from 2009 through 2011. Indirect oil costs, plus oil fuel costs, increase by a total of $1,330. Inflation has increased our hypothetical family’s cost of living by a total of $1,900 (7.6%) from 2009 through 2011. It should be noted that the price of oil has indirectly or directly accounted for 70% of this increase in the cost of living. The following graph shows the impact of food and fuel prices on our hypothetical lower income family.
The Cultural Economist