My Blog, Your Money

Quick, let’s say you are the parent of a son and a daughter.  Your son drives a Ford Mustang which gets 17 mpg in city driving and 26 mpg on the highway.  Your daughter, on the other hand, rides around town in a Toyota Corolla which gets 27/35 mpg.  Now let’s say you’re looking to buy one of them a new car.  Your son wants a car that averages 30 mpg and your daughter wants a Honda Insight which gets ~65 mpg.  Since you love your children equally and want to be objective, you decide to base your decision solely on fuel efficiency.  Whoever would save the most gas from the switch gets the new car.  To make it easy, assume your son averages 20 mpg in his Mustang while your daughter averages 32 mpg.  Assume that your son and daughter will drive the same distance.

Should you buy the car for your son or your daughter?  Many people would be surprised to learn that you should buy the car for your son.  This might seem counterintuitive at first.  After all, your daughter wants a car that gets ~33 more mpg which pretty much doubles her fuel economy.  But your son wants a car which gets only 10 more mpg and is only about 50% more efficient.

This is what is called a math illusion.  Let’s say your son and daughter both drive 12,000 miles in a year.  In the Mustang, your son would burn 600 gallons of gas.  With the 30 mpg car, that figure would be 400 gallons saving 200 gallons.  Now, let’s take a look at the daughter.  The Corolla would use 375 gallons while the gas-sipping Insight would use ~185 gallons.  That comes out to a savings of ~190 gallons, just slightly less than the 200 saved by the son.

If you fell for the illusion, there’s a trick to make things simple: think in terms of gallons per mile (gpm) instead of the ubiquitous miles per gallon.  For example, using the numbers from above, the son would save 0.0167 gpm (1 mile / 20 gallons – 1 mile / 30 gallons).  The daughter would save 0.0159 gpm (1 mile / 32 gallons – 1 / 65 gallons).  If you’re not a fan of decimals, it might helps to use longer distances such as 100 or 1,000 miles instead of 1 mile as the denominator.

So the next time you’re contemplating fuel efficiency, you might want to include gallons per mile when making your decision.

For further reading, here’s the report by Richard Larrick, a management professor at Duke: Gallons Per Mile Makes More Sense.