Two professors to lead gas price investigation
March 29, 2012
Filed under News
After the Wisconsin Department of Justice closed a nine-month investigation into Eau Claire’s high gas prices, unhappy community members believe there’s more to the story.
Two UW-Eau Claire faculty members in particular, together with the Eau Claire City Council and student support, are on a mission to find the answer.
Assistant professor of economics Laura Middlesworth, along with assistant professor of geography Ryan Weichelt, plans to spend the summer collecting and analyzing in-depth economic and geographical data of the Eau Claire fuel market and comparing it to similar areas.
“When you compare gas prices in Eau Claire to other areas, cities and towns in Western Wisconsin, the gas prices in Eau Claire consistently seem to be higher,” Middlesworth said. “The public certainly notices these details and they want some explanation.”
While the state’s initial investigation looked into price collusion (or deliberate manipulation of prices) among local gas owners, Weichelt said his committee’s
investigation is aimed towards examining the entire surrounding gas industry in order to better serve the community.
“The biggest thing that we’re interested in is that if things are higher — which it seems that they are a little bit higher — is to help people out because gas prices are going up and up and up,” he said. “If we’re finding that it is higher, it’s going to save people a little bit of money.”
City Council member David Duax said that for almost three decades, local gas prices in the Chippewa Valley have inexplicably been among the highest and most uniform in the state.
“In particular in the Eau Claire market, what has been misunderstood for many, many years, is why Eau Claire is always the high gas price leader in Wisconsin,” Duax said. “The other phenomenon in Eau Claire is all of our prices are always identical at every station and have been for a long time.”
Weichelt pointed out that the lack of differences in gas prices is odd, and if consumers are made aware of this issue, it might put pressure on companies to drive the prices down and save people — especially commuting students — money.
“It doesn’t sound like a lot — five cents — but (with) a ten or thirteen gallon tank, that’s sixty, seventy cents,” Weichelt said. “You start adding up four, five years that students are at Eau Claire and that can add up to a significant amount of money.”
The summer investigation is open to Eau Claire students interested in earning service learning credit. Middlesworth said that this is an excellent opportunity for
students to apply learned concepts outside of the classroom setting.
She added that they plan to present their results to the City Council, the local media and possibly at student research day next fall.
“This is one of these situations where we felt like students could use the skills and that knowledge that they’re learning in the classroom, and use it to help explain something that’s actually happening,” Middlesworth said.
Duax explained that they will be very proactive in their approach and will meet with company owners to discuss the local market issues if necessary.
“If we feel there’s some anti-competitive activity there, then we need to report it to the appropriate authorities to investigate,” Duax said.
Middlesworth and Weichelt said they lack the authority or resources to actually prosecute anyone for criminal behavior, but will strive for the betterment of both students and the community as a whole.
“We’re not going after anyone,” Weichelt said. “We’re just trying to help the students make the connection and also help the city out.”