Framing Fuel Efficiency: MPG vs. GPM

[david_myers]

Meet Jack and Jill as they march up the hill to buy a new vehicle. Hoping to save gas costs and benefit the environment, they are wavering between two options:

• trading their 34-mpg sedan for a 56-mpg Toyota Prius Eco.
• trading their hefty 12-mpg pickup truck for a 14-mpg Toyota Tundra.

Question: Assuming they drive both vehicles the same number of miles, which purchase would most reduce their gas consumption?

Most folks—you, also?—think the Prius would save more. After all, a 34- to 56-mpg jump is a 65 percent improvement, whereas a 12- to 14-mpg jump is but a 17 percent improvement.

I thought so, too, until a  mutual friend alerted me to social psychologist (and Duke business professor) Richard Larrick’s studies of the MPG illusion (see here and here).

To see the MPG illusion in action, let’s do the math, assuming that Jill and Jack drive each car 15,000 miles a year and pay $3.00 per gallon for gas:

• The 34-mpg sedan now consumes 15,000 ÷ 34 = 441 gallons; the new 56-mpg Prius would consume 15,000 ÷ 56 = 268 gallons. That’s 173 gallons and $519 saved.
• The 12-mpg pickup presently scarfs 15,000 ÷ 12 = 1250 gallons, compared with the Tundra’s 15,000 ÷ 14 = 1071 gallons. That’s 179 gallons and $537 saved.

The bottom line: A 2-mpg increase when purchasing or replacing a low-mileage car is hugely more beneficial—to the environment and to one’s pocketbook—than a 2-mpg increase when purchasing a high-mileage car. As Larrick says (but most folks don’t appreciate), “small MPG improvements on inefficient cars can save a lot of gas.”

We can cure the MPG illusion by reframing reported fuel efficiency as GPM—gallons per mile, rather than MPG—miles per gallon. When buying, isn’t that what we need to know: not how far can we drive on a gallon, but rather how many gallons must we buy to drive this car?

MPG is also useful—it tells us whether we can make it home before needing to refuel. But when purchasing a car, it’s gas consumption, not MPG, that matters most.

In recognition of the MPG illusion—the perception that equal MPG increases will represent equal gas savings—the U.S. Department of Energy now includes, albeit less prominently, GPM information on fuel economy labels (#5, below).

Larrick and his colleague Jack Soll report that when people stop to consider the GPM framing, most do then make fuel-smart judgments. And when people think smarter about fuel savings—when, for example, they realize that increasing fuel efficiency from 10 to 20 mpg will save twice as much as a 20 to 40 mpg increase—public energy conservation policies can become smarter as well. GPM framing helps us prioritize getting the most fuel-inefficient vehicles out of sales rooms and off the road.

P.S. For fellow data geeks, U.S. “Miles per hour” are increasing:

(For David Myers’ other essays on psychological science and everyday life, visit TalkPsych.com.)