A new study by Richard Larrick of Duke’s Fuqua School of Business, recently published in Science magazine shows that most people have the wrong intuition about how to save gas. This is because they misunderstand what the “miles per gallon” statistic actually represents. As a result of this they may not be doing the optimal things to decrease their gas consumption.

Lets look at a simple example.

Say you have 2 cars, a Honda Sedan which gets 30mpg and a Ford SUV which gets 15mpg. You put an equal number of miles on both cars and can’t get rid of the SUV because you need it for hauling SUV sized things.

Now you are proud of your eco-friendliness, you recycle your cans and buy only organic, free-range, local food, so you want to figure out what you can do to use less gas. You realize that you have enough money to upgrade one of your cars. You can replace the Sedan with a Hybrid that gets 55mpg or you can replace the SUV with a Hybrid that gets 22mpg. Which would you choose?

According to Larrick most people would replace the Sedan. Why? Because 50mpg sounds like a great thing! A gain of 25 mpg sounds far more Green Peacey than a gain of 7mpg.

Now, lets look at the math.

Lets say that you drive 1000 miles a month, evenly split between the two vehicles. That means that pre-upgrade we are burning:

500/30 + 500/15 = ~50.0 gallons of gas (16.6 for the Sedan, 33.3 for the SUV)

If we upgrade the Sedan, we get:

500/55 + 500/15 = ~42.4 gallons of gas (9.1 for the Sedan, 33.3 for the SUV)

If we upgrade the SUV, we get:

500/30 + 500/22 = ~39.3 gallons of gas (16.6 for the Sedan, 22.7 for the SUV)

So by upgrading the SUV, even though you only boost it by 7mpg you are actually burning less gas overall! Why is this? Because we are holding the number of miles driven fixed, thus the more important statistic is how many gallons per mile your car gets. Miles per gallon is useful when figuring out how far you can go on a tank of gas but less so, when you have a fixed distance to travel and are looking to figure out how much gas you’ll need.

Larrick’s paper concludes that people looking to save gas (or trees) should figure out the gallons per mile for their vehicles when considering upgrades. For our above examples we can see that the cars got (in units of gallons per 10 miles):

Sedan + SUV = 0.333 + 0.666 = 1 gallons/10 miles

Hybrid Sedan + SUV = 0.182 + 0.666 = 0.848 gallons/10 miles

Sedan + Hybrid SUV = 0.333 + 0.456 = 0.789 gallons/10 miles