Consumers’ gasoline price expectations: Who reacts to what?

This paper examines how U.S. consumers form twelve-month-ahead expectations about gasoline prices using data from the New York Fed's Survey of Consumer Expectations (SCE). Understanding how households interpret movements in a salient and volatile price component helps clarify the behavioral mechanisms underlying inflation dynamics. The analysis combines SCE microdata with state-level gasoline prices, expert forecasts from the U.S. Energy Information Administration (EIA), and a measure of consumer disagreement within a panel regression framework. The EIA forecast serves as a proxy for other information consumers may be exposed to, such as media coverage or expert assessments. The results show that consumers incorporate both recent local price changes and broader informational cues, but the relative importance of these sources differs across demographic groups and inflation environments. Older respondents react more strongly to observed price changes, consistent with experience-based learning, whereas men and those with higher education and income place greater weight on professional information. Interestingly, and in contrast to evidence on general inflation expectations, men report higher expected gasoline price increases than women. Consumers also exhibit asymmetric behavior, updating expectations mainly when gasoline prices fall, and the influence of informational signals is stronger when inflation is moderate. Overall, the findings indicate that expectation formation is heterogeneous and state-dependent, shaped by differences in information access and processing, with implications for inflation persistence and monetary policy communication.