Wednesday, December 10, 2008

The case for GPM in a nutshell

Which is more useful to know: How far you can drive on a gallon of gas? Or, how much gas you will use while owning a car?

MPG answers the first question. It is useful when judging the range of one's gas tank. But it answers a less important question. GPM answers the question of gas consumption. We suspect that, when buying a car, most people want to know gas consumption. Gas consumption, as measured by GPM, can be directly translated to the cost of driving the car and to the amount of greenhouse gas emissions. MPG cannot.

People rely on subtraction when comparing MPG, which creates illusions. The improvements from 10 to 11 MPG, 16.5 to 20 MPG, and 33 to 50 MPG all save the same amount of gas over a given distance (e.g., 100 gallons per 10,000 miles). Given the inverse relationship between MPG and GPM, MPG requires division before subtraction (e.g., 1/20 - 1/16.5 or 100/20 - 100/16.5). GPM makes the magnitude of gas savings clear without additional math. GPM allows car buyers to use subtraction to compare the fuel economy of different cars (e.g., 500 vs. 400 gallons per 10,000 miles).

Providing a column of GPM numbers at Consumer Reports and at would make accurate fuel economy comparisons far easier than the current column of MPG numbers. GPM needs to supplement MPG as a measure of fuel economy.

Monday, December 8, 2008

Summary of the MPG Illusion Studies

The MPG Illusion Studies (Originally posted at the Nudge Blog)

Follow this link to access the original Science article and online supplement.

Study 1: In the first study, college students were asked to rank each of the following vehicle changes (old car vs. new car) in terms of total gas saved, assuming that all the vehicles were driven 10,000 miles (shown in a random order):

A) 34 to 50 MPG
B) 18 to 28 MPG
C) 42 to 46 MPG
D) 16 to 20 MPG
E) 20 to 22 MPG

The majority of participants ranked the changes in order of the linear increase in improvement in mpg, (16 mpg for A, 10 mpg for B, etc.) However, in reality, B and D save more gas than A; D and E save more gas than C. Only 1 participant in 77 gave the correct order in terms of gas saved per 10,000 miles: B (198 gallons), D (125 gallons), A (94 gallons), E (38 gallons), C (30 gallons).

The A vs. B comparison is close to a family decision we made (to replace a minivan that got 18 mpg with a small station wagon, or to replace an efficient sedan with a hybrid compact). We were surprised to discover that option B saves twice as much gas as does A. Over 10,000 miles, B saves 198 gallons; A saves 94 gallons.

Study 2: A second study asked college students to price the gas savings from adding more efficient engines to a car that gets 15 mpg and costs $20,000, where the only feature that varies across vehicles was the mpg. Linear reasoning led them to undervalue improvements to 19 and 25 mpg and overvalue improvements to 55 mpg (under a range of discount rate assumptions).

Study 3: A third study showed that the mpg illusion could be broken by expressing efficiency as gallons per 100 miles (GPM). In this study, we asked a cross-section of adults to think about a town’s fleet of vehicles that all drove 10,000 miles per year. Half the vehicles in the fleet got 15 mpg and half got 34 mpg. Participants were asked to choose between 1) replacing the 15 MPG cars with vehicles that get 19 mpg, or 2) replacing the 34 MPG cars with vehicles that get 44 mpg.

Three-quarters preferred the second option when expressed as mpg. However, when gallons per 100 miles (GPM) information was also given, 64 percent correctly preferred the first option (replacing cars that got 6.67 gallons per 100 miles (GPM) with cars that got 5.26 GPM) to the second option (replacing cars that got 2.94 GPM with cars that got 2.27 GPM).

Option 1 (14 to 19 MPG) saves about 1.4 gallons per 100 miles compared to Option 2 (34 to 44 MPG), which saves only .7 for every vehicle replaced. In our scenario, Option 1 saves 14,035 gallons of gas per year; Option 2 saves only 6,684 gallons of gas per year.

Tuesday, December 2, 2008

Monday, December 1, 2008

The MPG Illusion in 2020

GPM shows that replacing the most inefficient cars (those with MPG in the teens) yields larger gas savings than improving already efficient cars. For example, convincing someone to trade in a 14 MPG car for a 20 MPG car reduces as much gas as having two people trade in a 33 MPG car for a 50 MPG car over the same distance.

Does the GPM argument apply only to today's highly inefficient cars? What if all cars in 2020 are "efficient" by 2009 standards (e.g., 50 MPG and above)? Is GPM still useful?

The answer is yes. Imagine that by 2020 cars range in MPG from 50 MPG (the Escalade superhybrid) to 170 MPG (the Prius superhybrid). GPM shows that the policy focus will always need to be on removing the most inefficient vehicles: Replacing a 50 MPG car with a 65 MPG car saves more gas (over a given distance) than replacing a 100 MPG car with a 170 MPG car.

Because of the curvilinear relationship between GPM and MPG, MPG will be potentially misleading even as cars become increasingly efficient. The benefits of thinking in terms of GPM will hold for all future efficiency levels, not just for today's SUVs.