‘Gallons per mile’? (Corrected)

‘Miles per Gallon’ or MPG is the de-facto measuring unit for fuel consumption in cars. That’s what we all use to define more or less fuel efficient cars, and the amount of gas we’d save or waste by traveling in them, right?

Well, would you say that you would save more gas (in absolute units: gallons of gas saved) when you moved from a 10MPG car to a 12MPG vehicle, or when you moved from a 25MPG vehicle to a 30MPG one?

Case 2 (25MPG to 30MPG), you say? That’s what I thought, too. Well, WRONG!! This is a very interesting post. Go read! (Also read the original article (subscription required)).

It turns out that even though having higher fuel efficient cars is of course more benefitial (higher MPG), it also helps to gain even small increases in fuel efficiency in low fuel efficiency cars (lower MPGs). The amount of gas that you save in gaining even a small increase in fuel efficiency (2MPG better in a 12MPG vehicle) may be larger than a large difference in fuel efficiency in more fuel efficient vehicles (10MPG better on a 40MPG vehicle, even!)

Time to usher in the Age of the ‘Gallons per Mile’, anyone? Even if it is, though, keep grabbing those Toyota Yaris-es, people!!

Update: There were errors in the post; now they have been corrected. 🙂

Bail out the Big Three?

USA is considering bailing out the three major automakers in the US – Ford, GM and Daimler-Chrysler. Whatever little I had learnt about this had led me to come to the logic that this bailout, even though apparently encouraging a failing concern, was unavoidable at this present juncture.

I thought that a plummeting auto industry would have a wide-spread impact on the economy as a whole. People losing jobs in the auto industry, which, let’s face it, directly or indirectly employ literally millions, would reduce their buying powers, thus affecting producers of other commodities and services, and hence slow the economy down even more. Essentially a vicious cycle. Or so I thought.

This piece has led me to start thinking otherwise. It’s interesting. Go read!

In particular, I was struck by the following lines in the write-up (as did Russel Roberts at Cafe Hayek):

Bailing out the Big Three is subsidizing failure. And you only subsidize something when you want more of it.

(Link via Cafe Hayek).