How GasPredictor.com's Seattle Gas Predictor Newsletter Saves You Money

On this page:

• The Bottom Line
• Description of the test scenario
• Highlights of the test
• Why can't we save money in Seattle?
• Table showing day-to-day events

The Bottom Line of the Test

Our subscriber paid $222.94 for gas since 9/21/2009. Our control driver paid $223.72. Our subscriber and the control driver are both ending the test with 12 gallons of gas in their tanks. Our subscriber spent $0.78 less than the control driver did. Extrapolating this savings over a full year (262 business days) yields an annual savings of $4.75.

Following our recommendations would save you $4.75 per year, or $0.16 more than the cost of a one-year subscription to the Gas Predictor Newsletter.

Note: We began publishing our Seattle Gas Predictor on September 21, 2009, so this test does not encompass an entire year of predictions.

Be sure to read "Why can't we save money in Seattle?" for an explanation of why this is a fluke. We firmly believe, and our experience with other cities has demonstrated, that with an actual year's worth of data to analyze, you would in fact save money using our predictions.

Even though you didn't save any money to speak of, you still get to smirk when you see the price go up and you knew it was going to go up. No extra charge.

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Description of the Test Scenario

This test compares two hypothetical drivers, the "subscriber" and the "control driver." Each has a car with a 14 gallon tank, each uses exactly two gallons of gasoline every business day, and each has just filled his tank the evening of September 20, 2009.

Our "control driver" does not subscribe to the Gas Predictor Newsletter. He simply leaves his gasoline budget to chance. He fills his tank whenever he gets home from work with only two gallons in the tank. Thus, he buys 12 gallons of gas every sixth business day, without regard to the cost. This represents the way most people buy gas, and shows how much a hypothetical driver would pay for gas without the benefit of our Gas Preditor.

On September 21, our "subscriber" begins receiving his Seattle Gas Predictor Newsletter by e-mail. Each night, he tries to follow our recommendations, even though he can not always do so. If we recommend buying gas that day, he fills his tank, even if he just filled it the night before. If we recommend holding off and buying gas the next day, he does not buy any gas unless his tank is absolutely empty. If his tank is empty, he buys four gallons of gas, to get him through the next couple of days, and yet leave enough room in his tank that he can take advantage of any buying opportunity that our newsletter recommends.

We recognize, of course, that this test is not quite realistic in several ways. For one thing, nobody uses exactly two gallons of gas every single day. And nobody drives their car only to work, not driving at all on non-business days. Nobody has off every day that the Chicago Mercantile Exchange (CME) commodity exchange is closed. Nobody buys gas by the gallon, instead rounding up to the next dollar or otherwise easy amount of money to enter in their checkbook (or to make change, if they're paying in cash). And even though our predictions are perfectly wonderful, we're sure none of our subscribers would bother to buy just two gallons of gas because we recommended it. (No, even we don't do that.) However, we had to come up with fixed, simple rules in order to make the test a fair comparison between using our predictions and not using them.

For this test of the Seattle Gas Predictor Newsletter, the price of gas used is the second-lowest price for unleaded regular gasoline in the Seattle area at about 9:00 AM Pacific Time.

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Highlights of the Test

• During the entire period September 21 through November 18, the control driver bought gas 7 times. Coincidentally, 3 of these times were also days when we recommended buying gas. He just got lucky! A slightly different turn of luck and our subscriber's savings would have been even greater.
• September 29: Although we recommended not buying gas, our subscriber's tank is empty, so he buys four gallons.
• October 8: Our subscriber fills up, at the exact bottom of a dip in prices. Prices had fallen 4 cents per gallon two days before, and would increase 3 cents per gallon (the largest one-day increase in this period) the next day.
• October 12: Although we recommended not buying gas, prices rose 2 cents per gallon the next day. Still, we count this as a correct prediction because we had predicted "steady" prices that day, and the final price of $2.619 the following morning (October 13) was within our predicted price range. Granted, if we had predicted this as a price increase, our subscriber would have saved even more money. October 12 was also the day of the single largest one-day price decrease during this period (5 cents per gallon).
• October 22: By lucky coincidence, the control driver buys gas on a day when we recommend buying gas. This enables him to avoid a 2-cent increase two days later.
• November 9: By lucky coincidence, the control driver buys gas on a day when we recommend buying gas. This enables him to take advantage of a 3-cent decrease that day.
• November 17: By lucky coincidence, the control driver buys gas on a day when we recommend buying gas. This enables him to avoid a 2-cent increase the next day.

Why Can't We Save Money in Seattle?

We have only been publishing the Seattle Gas Predictor Newsletter for less than two months as of our first anniversary on November 18. That's just 43 business days. In such a short time, there will be few opportunities to save money on gas. Morover, if there happens to be a coincidence such that the control driver bought gas at a very opportune time, that one stroke of luck will negate any advantage the subscriber might have.

Just such coincidences happened three times within the short time we have been publishing our Seattle Gas Predictor Newsletter. See "highlights of the test" above.

Yet even with that, our hypothetical driver did manage to save a little bit of money, albeit barely more than the cost of a subscription.

We are supremely confident that as time goes by, there will be fewer of these lucky breaks, and our hypothetical subscriber will save significantly more money on gas. In support of this confidence, we can look at what happened when we published a similar summary on the occasion of our 100th prediction. At that time, we had only been publishing our Chicago Gas Predictor Newsletter for a few weeks - 19 business days - and we got pretty dismal results. Now, more than 8 months later, the same test scenario results in a hypothetical savings of $8.75 per year for our Chicago subscriber. We are sure the same thing will happen as we generate more results for our hypothetical Seattle subscriber.

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Table of Day-to-Day Events in the Test

Key

• Date - The date we issued this prediction, pertaining to the next business day.
• Buy Today? - Did we recommend buying gas that day ("yes"), or waiting to buy gas the next day ("no")?
• Avg. Price - What was the second-lowest gas price in Seattle? This is the price on the date given, not the predicted price for the next day.
• Sub. Gas in Tank - How much gas did our subscriber have in his tank at the end of that day, when he received his Gas Predictor newsletter?
• Sub. Bought - How much gas did our subscriber buy that day, whether we recommended it or not?
• Sub. Paid - How much did our subscriber pay for the gas he bought that day?
• Ctl. Gas in Tank - How much gas did our control driver have in his tank at the end of that day?
• Ctl. Bought - How much gas did our control driver buy that day?
• Ctl. Paid - How much did our control driver pay for the gas he bought that day?

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