THE BLOG
11/02/2012 10:08 am ET | Updated Jan 23, 2014

Gas Lines in Jersey and the Quirks of Democracy

For the first time since Hurricane Katrina temporarily crimped oil supplies, gas lines have appeared in a significant part of the United States. This time, they're in New Jersey and, once again, they result from a hurricane. There are many widely cited reasons for the gas lines: damage to infrastructure has slowed oil shipments, lack of electricity renders pumps in some places inoperable and the frequent news reports about gas shortages probably leads more people to try to seek out fuel for themselves. More than a few commentators have pointed out, correctly, anti-"price gouging" rules (zealously enforced by Gov. Chris Christie's administration) attempt to overturn the laws of supply and demand by stopping filling station owners from raising their prices when demand skyrockets. All of this is true. But it also leaves out one important fact: New Jersey is one of only two states where people can't pump their own gas. And this regulation, as much as anything else, is causing delays at the state's gas stations: it takes a lot longer to have an attendant come out, take a credit card, pump gas and deliver a receipt than it does for drivers to pump gas themselves. And full-services' persistence, against all common sense, is a fascinating example of how public policies end up lasting far beyond their economically useful lives even without any big interests behind them.

Full-service gas stations with attendants who pumped gas, checked oil, inflated tires and so forth were the norm from the dawn of the automobile age until roughly the 1970s. For early cars that couldn't be left in the rain, required a multi-step process to start and had mechanically simpler but far-less-reliable innards, some sort of mini-tune-up at each fill up may well have been necessary. (Much higher smoking rates and simple gas pump designs may have created a bigger fire hazard too.) By the 1970s, however, rising oil prices, safer gas pumps, and the construction of cars that were more complex made it easy for people to pump their own gas. And, by the 1980s, all states but New Jersey and Oregon allowed it.

The publicly-stated reasons for the holdouts really don't make sense. Oregon cites 17 different safety-related reasons for doing it but, given the distinct lack of exploding gas stations in the 48 self-service states, this obviously doesn't wash. While requiring gas station attendants obviously does create some jobs they're hardly desirable ones by any account and their existence almost certainly creates some amount of economic deadweight loss. There's no union of gas station attendants of any size (most gas stations are small, family owned businesses where a union wouldn't do any good anyway). In both New Jersey and Oregon, gas station owners themselves have generally supported efforts to allow people to pump their own gas. Ultimately, people in the Oregon and New Jersey just like full service gas: a referendum in Oregon to allow self-serve went down in defeat in the 1980s and New Jersey (which has no referendums) has never seen a self-serve bill land on the governor's desk.

In New Jersey, furthermore, residents appear to have it pretty good. Although full-service makes their gas more expensive than it otherwise out be, they pay some of the lowest gas taxes in the entire country and see much higher prices for gas than those in adjoining self-service states that charge much higher taxes. (New Jersey also collects a lot of toll road revenue to pay for things that gas taxes would otherwise cover and has many in-state refineries that reduce fuel transportation costs.) Thus, even though their prices would be lower still if self-serve were allowed, the difference isn't obvious to residents.

Particularly as a solution to its current problems, New Jersey would do very well to allow self-service. Its residents obviously can pump their own gas like the rest of us. But it's almost certainly not going to happen. And, as impractical and anti-free-market as it is as it is, I suppose one has to give at least two cheers for the quirks of democratic governance that keep New Jersey's full-service gas regime in place.