Jack Uldrich
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Unlearning Miles Per Gallon

Posted in Automobile, General, Insurance, Marketing

Gallons_per_mileAccording to a new study by two professors at Duke University, consumers would make more informed buying decisions about automobiles if fuel efficiency information were conveyed in "gallons per mile" as opposed to "miles per gallon."

The current "miles per gallon" standard can play tricks on people’s intuitions. The reality 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. For example, using the first example of switching from a 10 mpg vehicle to a 20 mpg vehicle, if someone were driving 100 miles the change would result in a savings of 5 gallons. If, however, a family made the other switch (from a 25 to a 50 mpg vehicle) they would realize only a savings of two gallons.

The distinction is important because while it is obvious that a 50 mpg car would be the most fuel efficient, the reality is that many people still rely (or prefer) larger SUV’s and minivans or smaller, hybrid vehicles. Therefore, when in the market for a vehicle which they will actually use, they should concern themselves more with the "gallons per mile" than "miles per gallon." (For a better understanding of this argument, I’d recommend this article.)

It will be interesting to see if buyers, automobile companies, and even environmentalists can unlearn their old focus on "miles per gallon."



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