Saturday, April 22, 2017

Fuel Efficiency vs. Consumption: A Curvilinear Relationship

[Courtesy of the WSJ]

Americans are used to judging cars by mpg. The bigger the number, the better.
But miles per gallon is a measure of fuel efficiency, not consumption, and confusing the two causes drivers and policy makers to overlook—or even pass up—big savings available from modest improvements to the fuel economy of gas gluttons.
Why? Because mpg conceals consumption’s diminishing returns.
Intuitively, it might seem that improving the mileage of any car by 10 mpg would reduce fuel consumption by a constant amount. It doesn’t. Improving from 10 to 20 mpg saves five gallons of fuel over 100 miles. Improving from 40 to 50 mpg saves only half a gallon.
In geeky terms, the relationship is curvilinear, an unexpected bend in fuel consumption that leads people to undervalue improvements to gas guzzlers and overrate improvements to gas sippers.
Take the Lincoln Navigator, a luxury SUV that essentially huffs gas, and the Toyota Prius, a hybrid prized for its fuel economy. Between 2007 and 2017, the Navigator improved from 14 to 17 mpg, saving 1.26 gallons of gas over 100 miles. At the same time, the Prius improved from 46 to 52 mpg, saving only a quarter of a gallon of gas over the same distance.
Two Duke University professors call this the mpg illusion. Demystifying it may be particularly valuable given President Donald Trump’s plans to review, and possibly roll back, fuel-economy standards requiring auto makers to deliver a fleet average of 54.5 mpg by 2025.
The professors, who teach at Duke’s Fuqua School of Business, noticed the illusion while carpooling to work.
Inspired by his hybrid’s minute-by-minute mpg display, Jack B. Soll posed this puzzler to his colleague Richard P. Larrick: Suppose you drive uphill for 100 miles and get 10 mpg, then turn around and drive downhill the same distance and get 100 mpg. What’s the average mpg? 
“It feels like it should be 50, but it’s more like 20,” Dr. Larrick said. “We were playing with numbers and realizing it was hard to do the right math.”
Around the same time, Dr. Larrick and his family were deciding which of two cars they should trade in.
“We could trade a minivan that got 18 mpg for a wagon that got 28 mpg, or we could trade a sedan that got 30 mpg for a hybrid sedan that got 50 mpg,” he said. “It felt like moving from 30 to 50 mpg had to save more gas.”
Instead, he figured out that upgrading from 18 to 28 mpg saved about 50% more fuel. The family opted for the wagon.
Of course, retiring all gas hogs in favor of the most efficient vehicles would produce the greatest fuel savings.
Short of that, the Duke professors argue that substantial savings can be had by replacing the worst vehicles on the road with models that get moderately good mileage.
“You want to pull vehicles out of the teens and into the high 20s,” Dr. Larrick said. “Right around 30 mpg is the sweet spot. Things get really flat after that.”
He and Dr. Soll aren’t the first people to point out the value of modest fuel savings, but during the recession, the approach attracted yawns or, worse, scorn.
U.S. Rep. Jim Sensenbrenner (R., Wis.) pushed legislation to fund the development of hybrid medium- and heavy-duty trucks, noting that as few as 10,000 could reduce diesel fuel use by 7.2 million gallons a year. At the time, heavy-duty trucks averaged about 6.5 mpg, and there were 2.2 million on the road. The bill expired without consideration in the Senate.
Former President Barack Obama, while still a U.S. senator, was mocked for observing that properly inflated tires and regular tuneups could save as much oil as new offshore drilling would produce.
Cash for Clunkers, a $3 billion government program to encourage spending on fuel-efficient vehicles, was derided in part because clunkers averaging 15.8 mpg were traded for replacements that averaged just 24.9 mpg.
Drs. Larrick and Soll, who believe improving a gas hog by even 2 mpg is significant, said the confusion over improvements in fuel economy could be eliminated by dropping miles per gallon as the preferred metric in favor of gallons per 100 miles. Such a move would be similar to the standard used in Canada, which list liters per 100 kilometers on the fuel consumption labels of new vehicles.
The latest U.S. fuel economy label includes both pieces of information. The largest and boldest figure is still mpg. But just below it, in smaller print, is gallons per 100 miles—a straight forward solution for handling the curve.

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