Class Slides for the MPG Illusion These slides

Class Slides for the MPG Illusion These slides may be used without copyright approval Please acknowledge http: //www. mpgillusion. com as the source: http: //www. mpgillusion. com

MPG Quiz • Assume that a person drives 10, 000 miles per year and is contemplating changing from a current vehicle to a new one. • Rank the following five pairs of old and new vehicles in order of their benefit to the environment (i. e. , which new car would reduce gas consumption the most compared to the original car). • Use 1 for the largest savings and 5 for the smallest savings. source: http: //www. mpgillusion. com

MPG Quiz Rank the gas savings from MPG improvements for a car driven 10, 000 miles (1 = largest, 5 = smallest) Change in Vehicle Pairs (Old Vehicle to New Vehicle) Rank in Gas Savings? A) 18 MPG to 28 MPG B) 16 MPG to 20 MPG C) 34 MPG to 50 MPG D) 22 MPG to 24 MPG E) 42 MPG to 48 MPG source: http: //www. mpgillusion. com

MPG Quiz – Typical Ranks Rank the gas savings from MPG improvements for a car driven 10, 000 miles (1 = largest, 5 = smallest) Change in Vehicle Pairs (Old Vehicle to New Vehicle) Rank in Gas Savings? A) 18 MPG to 28 MPG 2 B) 16 MPG to 20 MPG 4 C) 34 MPG to 50 MPG 1 D) 22 MPG to 24 MPG 5 E) 42 MPG to 48 MPG 3 source: http: //www. mpgillusion. com

MPG Quiz – Actual Ranks Rank the gas savings from MPG improvements for a car driven 10, 000 miles (1 = largest, 5 = smallest) Change in Vehicle Pairs (Old Vehicle to New Vehicle) Perceived Rank in Gas Savings (Mean) Actual Rank in Gas Savings Actual Reduction in Gas Consumption per 10, 000 miles A) 18 MPG to 28 MPG 2 1 198. 4 B) 16 MPG to 20 MPG 4 2 125. 0 C) 34 MPG to 50 MPG 1 3 94. 1 D) 22 MPG to 24 MPG 5 4 37. 9 E) 42 MPG to 48 MPG 3 5 29. 8 source: http: //www. mpgillusion. com

Alernative Quiz http: //www. mpgquiz. com/ source: http: //www. mpgillusion. com

Judgments of Car Fuel Efficiency • Standard measure in US – Miles per gallon (MPG) • What does it measure? – Useful for knowing range of gas tank • What question do you want to answer when buying a car? – How much gas you’re going to use » Cost of gas » Greenhouse gases (burning 1 gallon of gas releases 20 pounds of carbon) source: http: //www. mpgillusion. com

The Problem with MPG • Consider three people who each drive 100 miles per week. Their current vehicles have the following fuel efficiency: – Person A: 10 MPG – Person B: 16. 5 MPG – Person C: 33 MPG source: http: //www. mpgillusion. com

The Problem with MPG • Each driver trades in his or her car for a more efficient car – Person A: 10 MPG -> 11 MPG – Person B: 16. 5 MPG -> 20 MPG – Person C: 33 MPG -> 50 MPG • Who saves the most gas over 100 miles? • Result: Each trade-in reduces gas consumption by the same amount – In each case, the new car saves 1 gallon per 100 miles – The new car eliminates 1 ton of carbon per 10, 000 miles source: http: //www. mpgillusion. com

Calculating Gas Savings • To know gas consumption and gas savings, one needs to divide the distance one drives by MPG – Gas consumption = Distance / MPG – Conclusions • Gas savings are not a linear function of MPG • The relationship between gallons consumed and MPG is curvilinear • Gallons consumed can be abbreviated “Gallons per Mile” or “GPM” for short • The following graph and tables illustrate the relationship source: http: //www. mpgillusion. com

Gas Consumption as a Function of MPG source: http: //www. mpgillusion. com

Converting MPG to GPM – Equal MPG Miles Per Gallons Per 100 Miles Gallons Per 10, 000 Miles 10 1000 15 6. 7 667 20 5. 0 500 25 4. 0 400 30 3. 3 333 35 2. 9 286 40 2. 5 250 45 2. 2 222 50 2 200 This table displays total gas consumption based on equal increases in MPG source: http: //www. mpgillusion. com

Converting MPG to GPM – Equal GPM Miles Per Gallons Per 100 Miles Gallons Per 10, 000 Miles 10. 0 10 1000 11. 0 9 900 12. 5 8 800 14. 0 7 700 16. 5 6 600 20. 0 5 500 25. 0 4 400 33. 0 3 300 50. 0 2 200 This table displays MPG improvements that yield equal decreases in gas consumption (1 gallon per 100 miles or 100 gallons per 10, 000 miles) source: http: //www. mpgillusion. com

Summary of Research • The following slides summarize the results of research published by Larrick & Soll (Science, 2008) source: http: //www. mpgillusion. com

Study 1: Ranking Improvements (n = 77, Larrick & Soll, Science, 2008) Task: Rank gas savings from MPG improvements for a car driven 10, 000 miles (1 = largest, 5 = smallest) Change in Vehicle Pairs (Old Vehicle to New Vehicle) Perceived Rank in Gas Savings (Mean) 34 MPG to 50 MPG 1. 18 18 MPG to 28 MPG 1. 95 42 MPG to 48 MPG 3. 29 16 MPG to 20 MPG 3. 73 22 MPG to 24 MPG 4. 86 source: http: //www. mpgillusion. com

Study 1: Ranking Improvements (n = 77, Larrick & Soll, Science, 2008) Task: Rank gas savings from MPG improvements for a car driven 10, 000 miles (1 = largest, 5 = smallest) Change in Vehicle Pairs (Old Vehicle to New Vehicle) Perceived Rank in Gas Savings (Mean) Actual Rank Actual Reduction in Gas Savings Consumption per 10, 000 miles 34 MPG to 50 MPG 1. 18 3 94. 1 18 MPG to 28 MPG 1. 95 1 198. 4 42 MPG to 48 MPG 3. 29 5 29. 8 16 MPG to 20 MPG 3. 73 2 125. 0 22 MPG to 24 MPG 4. 86 4 37. 9 source: http: //www. mpgillusion. com

Study 3: Fleet Decision (n = 171 in a national survey, Larrick & Soll, Science, 2008) • A town maintains a fleet of vehicles for town employee use. It has two types of vehicles. – Type A gets 15 miles per gallon. – Type B gets 34 miles per gallon. • The town has 100 Type A vehicles and 100 Type B vehicles. • Each car in the fleet is driven 10, 000 miles per year. • They can afford to replace one type of vehicle with a hybrid (H) option. – Type AH gets 19 miles per gallon. – Type BH gets 44 miles per gallon. source: http: //www. mpgillusion. com

Study 3: Fleet Decision (n = 171 in a national survey, Larrick & Soll, Science, 2008) • They can afford to replace one type of vehicle with a hybrid (H) option. MPG Frame 1) Replace the Type A vehicles (15 mpg) with Type AH that gets 19 mpg 2) Replace the Type B vehicles (34 mpg) with Type BH that gets 44 mpg GPM frame: Participants saw both MPG and “Gallons per 100 miles” 1) Replace the Type A vehicles (6. 67 gpm) with Type AH that gets 5. 26 gpm 2) Replace the Type B vehicles (2. 94 gpm) with Type BH that gets 2. 27 gpm source: http: //www. mpgillusion. com

Study 3: Fleet Decision (n = 171 in a national survey, Larrick & Soll, Science, 2008) • They can afford to replace one type of vehicle with a hybrid (H) option. MPG Frame 1) Replace the Type A vehicles (15 mpg) with Type AH that gets 19 mpg 2) Replace the Type B vehicles (34 mpg) with Type BH that gets 44 mpg Result: 75% of participants incorrectly favored Option 2 GPM frame: Participants saw both MPG and “Gallons per 100 miles” 1) Replace the Type A vehicles (6. 67 gpm) with Type AH that gets 5. 26 gpm 2) Replace the Type B vehicles (2. 94 gpm) with Type BH that gets 2. 27 gpm Result: 64% of participants correctly favored Option 1 source: http: //www. mpgillusion. com

Specific Policy Implications • For car purchase decisions, provide a measure of efficiency that is volume of gas divided by distance – Europe and Canada use liters per 100 kilometers – United States • What should the US use as a basic “gallons per mile” measure? • Where should it be reported? • Example of an online GPM calculator for new cars – www. gpmcalculator. com source: http: //www. mpgillusion. com

Improving Decision Making • How can psychology be used to improve a range of decisions? – “Choice architecture” principles from Nudge (Thaler & Sunstein, 2008): • Set defaults to encourage people to make more prudent choices. • Provide explicit feedback to help people recognize when they are doing well and when they are making mistakes. • Help people see the connection between their options and what choices will actually make them better off. • Design incentives so that benefits and costs are clear. • Design “forgiving” systems that take into account the fact that people will make mistakes. • Structure complex choices so they are easier for people to understand. source: http: //www. mpgillusion. com

Improving GHG Decisions • What can psychology contribute to reducing greenhouse gas emissions? – Car choice – Car use – Other transportation • What new tools could help people make decisions that reduced greenhouse gas emissions in general? source: http: //www. mpgillusion. com

Useful Links and References http: //www. mpgillusion. com http: //www. mpgquiz. com http: //www. mpgillusionvideo. com http: //www. gpmcalculator. com http: //www. mpgillusion. com/2009/01/classroom-materials. html http: //faculty. fuqua. duke. edu/~larrick/bio/Reshighlights. htm http: //www. nytimes. com/2008/12/14/magazine/14 Ideas-Section 2 -B-t-005. html Larrick, R. P. , & Soll, J. B. (2008). The MPG Illusion, Science, 320, 1593 -1594 Thaler, R. H. , & Sunstein, C. (2008). Nudge. New Haven: Yale. source: http: //www. mpgillusion. com