The MPG Illusion June 20, 2008

Miles per gallon can be very misleading as an indicator of fuel efficiency, say researchers at Duke University’s Fuqua School of Business, Richard Larrick and Jack Soll.

So, your blood pressure starts to soar every time you fill up at the gas pump, right? You’re ready to trade in your car for one that’s more fuel efficient.

When you’re standing in the car lot, however, how do you compare vehicles? MPG? A more accurate way to calculate the amount of gas used is to divide distance by MPG.

Larrick and Soll use the following example to illustrate their point:

A family has two cars. One gets 10 MPG and the other gets 25 MPG. Both are driven roughly the same distance in a year. Is the family better off replacing the 10 MPG car with one that gets 20 MPG? Or the 25 MPG car with one that gets 50 MPG?

In terms of MPG, both represent a 100% increase in MPG or cutting your gas use in half.

The actual gas usage for 100 miles driven for each vehicle is:

• 10 MPG = 10 gallons per 100 miles
• 20 MPG = 5 gallons per 100 miles
• 25 MPG = 4 gallons per 100 miles
• 50 MPG = 2 gallons per 100 miles

Gallons per 100 miles = 100 miles ÷ MPG

In terms of gas consumption, the family should replace the 10 MPG with the 20 MPG vehicle, saving 5 gallons of gas every 100 miles. If they replaced the 25 MPG with a 50 MPG car, they would only save 2 gallons of gas every 100 miles. Using MPG as the sole indicator of gas consumption doesn’t take into account the starting number of MPG. You save more by cutting 10 gallons in half than 4 gallons in half.

Striving to be as fuel efficient as you can may not mean you can afford a new hybrid that cost over $20,000. However, you can choose the most fuel efficient vehicle that you can afford by measuring gallons per mile.  

Resources:

• Calculating Gallons per Mile
• Gas Mileage and Car Shopping – Quick Reference Tables
• The MPG Illusion
• Watch The MPG Illusion video

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