Gallons per One Hundred Thousand Miles

Gallons per One Hundred Thousand Miles

Back in 2008, I blogged about Fuqua professor Rick Larrick’s research on flipping the way we talk about fuel efficiency from the familiar “miles per gallon” to “gallons used per 100 miles driven” and later that year I followed up with a post on some of the traction that idea had gained and the GPM calculator they had posted online (still up and running now).

“Giving the gas cost over the lifetime of the vehicle seems to give people a better understanding of its fuel efficiency,” Larrick said. “The current metrics used don’t help people to understand the true value of a fuel-efficient vehicle.”  -from the latest research

Last week I got a Fuqua email update that featured Larrick’s latest work on GPM, including the info that in 2013 the EPA had added “gallons per 100 miles driven” to its fuel economy labels. Larrick’s latest work shows that this label may soon warrant an update – apparently consumers prefer a fuel-efficient vehicle when they are shown the statistic of gallons per 100,000 miles driven, even when the expected cost savings in fuel efficiency does not make up for the higher cost of the fuel efficient vehicle.

“Consumers place a lot more weight on fuel efficiency when this information is given to them in terms of gas cost over 100,000 miles,” Camilleri said. “The amazing thing is that this greater weight persists even when the efficient vehicle doesn’t necessarily pay for itself in savings, which makes sense for the consumer who also cares about the environment.” 

I always find it fascinating when a change in language is able to impact cultural values and individual behavior, and the idea that this is so powerful that environmentalism could trump cost in a purchase decision is remarkable. However, I’m also a bit skeptical, as survey answers are not always a reliable indicator of actual consumer behavior. Still, even if this only works for cases when fuel efficiency is also cost efficient, this is a great way to make an impact by simply changing the language we use.

Better fuel efficiency through better labels – gpm vs mpg

We all know how important language is in persuading people to think certain ways, and that certain words and phrases in common use are politicized rhetoric (think pro-life and pro-choice).  However, I never thought of “miles per gallon” as one of those potentially misleading phrases.  Until I read this in a Fuqua Alumni email:

For example, most people ranked an improvement from 34 to 50 mpg as saving more gas over 10,000 miles than an improvement from 18 to 28 mpg, even though the latter saves twice as much gas. (Going from 34 to 50 mpg saves 94 gallons; but from 18 to 28 mpg saves 198 gallons).

These mistaken impressions were corrected, however, when participants were presented with fuel efficiency expressed in gallons used per 100 miles rather than mpg. Viewed this way, 18 mpg becomes 5.5 gallons per 100 miles, and 28 mpg is 3.6 gallons per 100 miles — an $8 difference today.

“The reality that few people appreciate 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,” Larrick said. (See table.)

See the full article here, including a video link.