Estimation question

How much money is spent in the USA per year on gas?

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What this question tests

Quantitative estimation skill: breaking an unfamiliar number into a defensible chain of assumptions and sanity checking the result.

How to approach it

  1. Clarify whether gas means gasoline for vehicles or utility gas, and state you will estimate gasoline spend.
  2. Estimate the US population and the share who drive, roughly 330 million people and about 230 million licensed drivers.
  3. Estimate average miles driven per driver per year, around 13,000 miles, and average fuel efficiency, about 25 mpg.
  4. Compute annual gallons per driver, then multiply by driver count to get total gallons.
  5. Multiply total gallons by an assumed average price per gallon, around $3.50, to get total spend.
  6. Sanity check the result against known US fuel industry scale.

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