Cowboy Economics
Recent News |  Archives |  Tags |  About |  Newsletter |  Submit News |  Links |  Subscribe to CowboyEconomics.com RSS Feed Subscribe

Gallons Per Mile Makes More Sense (6/23/2008)

Tags:
gasoline, travel industry

Duke management professors Jack Soll (left) and Richard Larrick began discussing fuel efficiency statistics while carpooling in Soll's hybrid Toyota Camry. - Duke Photography - Les Todd
Duke management professors Jack Soll (left) and Richard Larrick began discussing fuel efficiency statistics while carpooling in Soll's hybrid Toyota Camry. - Duke Photography - Les Todd
Expressing efficiency in gallons, not miles, leads to better decisions

Posting a vehicle's fuel efficiency in "gallons per mile" rather than "miles per gallon" would help consumers make better decisions about car purchases and environmental impact, researchers from Duke University's Fuqua School of Business report in the June 20 issue of Science magazine.

Inspired by debates they had while carpooling in a hybrid car, management professors Richard Larrick and Jack Soll ran a series of experiments showing that the current standard, miles per gallon or mpg, leads consumers to believe that fuel consumption is reduced at an even rate as efficiency improves. People presented with a series of car choices in which fuel efficiency was defined in miles per gallon were not able to easily identify the choice that would result in the greatest gains in fuel efficiency.

For example, most people ranked an improvement from 34 to 50 mpg as saving more gas over 10,000 miles than an improvement from 18 to 28 mpg, even though the latter saves twice as much gas. (Going from 34 to 50 mpg saves 94 gallons; but from 18 to 28 mpg saves 198 gallons).

These mistaken impressions were corrected, however, when participants were presented with fuel efficiency expressed in gallons used per 100 miles rather than mpg. Viewed this way, 18 mpg becomes 5.5 gallons per 100 miles, and 28 mpg is 3.6 gallons per 100 miles -- an $8 difference today.

"The reality that few people appreciate is that improving fuel efficiency from 10 to 20 mpg is actually a more significant savings than improving from 25 to 50 mpg for the same distance of driving," Larrick said.

Soll noted that replacing a large vehicle that gets 10 mpg with one that gets 20 mpg reduces gas use per 100 miles from 10 gallons to five, a 5-gallon savings. Replacing a small vehicle that gets 25 mpg with one that gets 50 mpg reduces gas use per 100 miles from 4 gallons to 2, a saving of only 2 gallons.

"Miles per gallon is misleading and can play tricks on our intuitions," Soll said.

"For families and other owners of more than one type of vehicle, the greatest fuel savings often comes from improving the efficiency of the less efficient car," Soll added. "When fuel efficiency is expressed as gallons per 100 miles, similar to what is done in other countries, it becomes clear which combination of cars will save a family the most gas.

"We believe that everyone should try to be as fuel efficient as possible. For some people, that may mean driving the most efficient car available, such as a small hybrid car, but for others it may mean finding the most efficient option possible within their chosen class of car," Soll said. "There are significant savings to be had by improving efficiency by even two or three miles per gallon on inefficient cars, but because we communicate in miles per gallon, that savings is not immediately evident to consumers."

The authors recommend that consumer publications and car manufacturers list efficiency in terms of gallons per 10,000 miles driven. "This measure makes it easy to see how much gas one might use in a given year of driving and how much gas, and money, can be saved by opting for a car with greater efficiency," Larrick said.

Larrick and Soll's research was funded by Duke University.

Note: This story has been adapted from a news release issued by Duke University

Post Comments:

Search

New Articles
Increased worker flexibility not always a good thing

Foreclosure reduces a home's sale price by 27 percent on average

Start of Ramadan could signal substantial stock gains

Researcher says Chinese credit market remains underdeveloped

Customers less tolerant of employee rudeness than incompetence

When the quiet logo speaks volumes

Professor credits diversified revenue for success of world's top airportsProfessor credits diversified revenue for success of world's top airports

Real ale buffs - Britain's role models for economic recoveryReal ale buffs - Britain's role models for economic recovery

A study of house prices: Do the benefits of disclosure outweigh the risks?

Reports detail global investment and other trends in green energyReports detail global investment and other trends in green energy

'Econophysics' points way to fair salaries in free market'Econophysics' points way to fair salaries in free market

Green goes mainstream: Biodiversity is climbing the corporate agenda

Executives who take the fewest risks have the most negative emotionsExecutives who take the fewest risks have the most negative emotions

Legalizing marijuana in California would lower the price of the drug and increase use, study findsLegalizing marijuana in California would lower the price of the drug and increase use, study finds

New book offers at-a-glance overview of business world



Archives
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007


  Archives |  Submit News |  Advertise With Us |  Contact Us |  Links
Use of this site constitutes acceptance of our Terms of Service and Privacy Policy. All contents © 2000 - 2011 Web Doodle, LLC. All rights reserved.