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June 25, 2008

The Psychology of Fuel Efficiency

A recent discussion started by John Lynch on the Society for Judgment and Decisionmaking listserv focuses on an interesting new article by Larrick and Soll in Science, entitled the "MPG Illusion."  The paper reemphasizes the point that statistical metrics matter.  It argues that the traditional miles per gallon metric leads people to make inaccurate judgments on the benefits of more efficient cars.

For example, Richard Larrick in his podcast makes an argument along the following lines.  Say you have the ability to trade in a 10 MPG SUV for a 20 MPG crossover, or a 25 MPG car for a 50 MPG hybrid.  Which switch is better for the environment?  As it turns out, the former, even though one might be tempted to say that the former only improves efficiency by 10 MPG while the latter improves it by 25.   Assume a 100 mile trip.  The SUV will consume 10 gallons versus 5 gallons for the crossover for a net savings of 5 gallons.  The car will consume 4 gallongs versus 2 gallons for the hybrid for a net savings of 2 gallons. 

It seems that since we drive given distances (e.g. 100 mi), rather than specific amounts of fuel, the MPG is a misleading measure of efficiency.  Small increases in efficiency down at the low end make much more of a difference than at the high end.  Larrick & Soll argue that an inverse ratio, gallons per 10,000 miles, might be a more useful measure.

More information is available on Larrick's website, which has links to the Science article, podcast, and supplemental materials.

--EKC

June 25, 2008 | Permalink

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Comments

The Canadian standard for fuel efficiency stickers on new vehicles is liters per 100 kilometers. A smaller number indicates better fuel efficiency than a larger number.

Posted by: Greg JOnes | Jun 26, 2008 9:44:13 AM

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