June 20, 2008

Drivers Misled By ‘Miles-Per-Gallon’ Rating

Researchers said Thursday that the key to saving money on ever growing fuel prices is looking at vehicle efficiency in a new way: gallons-per-mile.
Duke Larrick, a researcher with Duke University, said, "There is a math illusion here." His study was published in the journal Science.
As the price of gasoline tops $4 a gallon, using miles-per-gallon can be misleading for those trying to save dollars.

Richard Larrick and Jack Soll discussed fuel efficiency while carpooling to work at Duke University's Fuqua School of Business.

The result is a paper called "The MPG Illusion," appearing Friday in the journal Science.

The professors studied how consumers perceive statistics and decided to look into the auto efficiency ratings and what they tell consumers.

In essence, they say, don't ignore what may seem like a small gain, it can still mean big savings at the pump.

Larrick said, not everyone is a good candidate for a tiny car. A family of five or six needs a larger vehicle. Moving to even a slightly more efficient large car can mean big savings.

"We realized improving low mpgs is where the big bang is," Larrick said. "But we realized that people were not going to understand that."

Jack Gillis of the Consumer Federation of America called their paper "extraordinarily profound in its simplicity."
The study shows drivers with inefficient cars, who may feel they have no options, can experience major savings by just moderately increasing their fuel efficiency.

Gillis said, "I am convinced that the average, extraordinarily frustrated, owner of a fuel inefficient car has no idea that making a small improvement will save more money and will save the environment more than a larger improvement in a more efficient car".
So how do you find savings in miles per gallon?

Duke researchers calculated that at $4-a-gallon, over 10,000 miles, an improvement from 12 mpg to 13 mpg would save a driver $256. For the owner of a 33 mpg car to save that much, mileage would have to go up to 40 mpg, he said.

Here's how the theory works. Say a couple drives a 25 mpg sedan. They trade it for a 50 mpg hybrid, a 25 mpg improvement.

A family with mom, dad and three kids has a 10 mpg SUV to haul everyone around. They trade it for a 20 mpg station wagon, a 10 mpg improvement.

Sounds like the couple did better, at least in miles per gallon, but lets re-examine gallons per mile.

At 25 mpg the couple burned 400 gallons over a year and their new 50 mpg hybrid cuts that to 200 gallons. They save 200 gallons.

At 10 mpg the family's SUV burns 1,000 gallons of gas a year. At 20 mpg the station wagon burns 500 gallons - they save 500 gallons, much better than the couple.

Larrick tested his theory in a number of different experiments on U.S. college students.

When presented with a series of car choices in which fuel efficiency was defined in miles per gallon, the students could not easily identify the choice that would result in the greatest gains in fuel efficiency.

Larrick found people had a much easier time when fuel efficiency was expressed in gallons per 100 miles.

For example, a car that gets 18 miles per gallon uses 5.5 gallons of gas per 100 miles, and a car that gets 28 miles per gallon uses just 3.6 gallons per 100 miles. Plus, with gasoline prices over $4 a gallon, that's a difference of about $8 per 100 miles.

"If we just turn everything around, you can see where the large savings are in gallons of gas," Larrick said.

The idea is not new. Many other countries, especially in Europe, already use a standard that compares gas used per trip.

To translate miles per gallon into gallons per 10,000, Larrick said drivers should simply divide 10,000 by miles per gallon. Cars with the highest miles per gallon are always the most fuel efficient, he said. He cautions that it's when consumers try to replace a car that they may be misled.

Duke researchers want to make choices easier, by recommending consumer publications and car makers start listing fuel efficiency in terms of gallons per 10,000 miles driven, which he said is roughly the distance people in the United States drive in a year.


On the Net:


Duke University