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Changing vehicles - a quick thought experiment

Geoff Riley

24th June 2008

Taken from Dan Ariely’s excellent site - here is a question to pose to your students!

You have two cars, one is a very inefficient van (giving you on average 5 miles per gallon (mpg)) and one is a relatively efficient car (giving you on average 20mpg). Due to your work and obligations you have to drive each of them the same distance every month. You need both types of vehicles and for now you can replace only one of them. What should you replace?

Option 1: Replace the 5 MPG van with a 10 MPG van

Option 2 Replace the 20 MPG car with a 50 MPG car

What would you select?

I did a quick email survey/test using the voting buttons on outlook express (and hoping that students didn’t copy and paste the question into Google and find their way to Dan’s site!) Here are the results from answers submitted from the first fifty-two replies to the email survey!

Option 1 20
Option 2 32

Dan’s explanation is here:

And the original research is here:

“Using “miles per gallon” as a measure of fuel efficiency leads people to undervalue the benefits of replacing the most inefficient automobiles”

There might be some relevance here to the debate over how best to cut carbon emissions? Cut those emissions which can be reduced most efficiently! Or perhaps look for other ways of getting from A to B rather than relying on cars and vans!

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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