Efficiency measure gives wrong signals: study

Efficiency measure gives wrong signals: study
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First Published: Fri, Jun 20 2008. 12 14 AM IST

Updated: Fri, Jun 20 2008. 12 14 AM IST
Bangalore: In measuring fuel efficiency, should consumerslook at how many kilometres a vehicle will run on a litre of fuel or how many litres of fuel a car will burn over a fixed standard distance, say, 10,000km?
A new research report in Friday’s issue of the journal Science by researchers from the Fuqua School of Business, Duke University, in North Carolina, US, shows that the current standard, kilometres per litre (kmpl) in India or miles per gallon (mpg) in the US, leads consumers to make incorrect assumptions about fuel efficiency.
(DIFFERING STANDARDS) In a set of experiments and surveys, researchers showed that when people were presented with a series of car choices in which fuel efficiency was defined in the traditional measure of kmpl, they were not able to easily identify the choice that would give them the best fuel efficiency.
“I think our most novel proposal is to increase the distance that is used as thebase—use litres per 10,000km, as this is the distance someone might drive in a year,” said Richard P. Larrick, the lead researcher from Fuqua.
For example, in the experiment most people ranked an improvement from 14.4kmpl to 21.2kmpl as saving more fuel over 10,000km, than an improvement from 7.6kmpl to 11.9kmpl even though the latter saves twice as much gas.
In the first choice, 221.3 litres of fuel is saved whereas it increases to 466.6 litres in the second choice.
To be sure, the vehicle offering the first choice is more fuel-efficient in both cases than the vehicle offering the second choice, but customers are still likely to be confused by these paired kmpl mumbers while buying a second car or switching cars.
Researchers say that these mistaken impressions were, however, corrected when participants were presented with fuel efficiency expressed in litres used in 100km or a standard distance travelled, rather than kmpl.
The new measure of course raises the practical question of the cost of implementation but analysts believe that the industry could use it to its benefit. “I don’t think it’d be difficult for the auto industry to adopt this measure,” said V.G. Ramakrishnan, director, automotive and transportation practice at Frost & Sullivan, South Asia and Middle East. “Manufacturers of cars with good fuel efficiency could use this as a good marketing strategy,” he said.
However, the industry body, Society of Indian Automobile Manufacturers, or Siam, doesn’t quite approve of the switch from kmpl to litres over a standard measure of longer distance such as 100km. “There’d be confusion and nobody would be able to appreciate or apprehend it,” said K.K. Gandhi, executive director at Siam in New Delhi.
In several Western countries, the price per litre or gram of goods are marked by stores, to show how much consumers are paying per 100g of, say, five different brands of shampoo, to show which would be the cheapest buy and which the most expensive in terms of usage. This is usually displayed alongside the full price per bottle of shampoo.
For people like Gandhi, units are not important; it’s the fuel economy that matters.But for researchers, the objective is to help consumers find the most efficient option possible within their chosen class of car.
“There are significant savings to be had by improving efficiency by even 2-3 miles per gallon (kmpl) on inefficient cars, but because we communicate in mpg (or kmpl), that savings is not immediately evident to consumers,” said Jack B. Soll, co-researcher of the Duke University study.
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First Published: Fri, Jun 20 2008. 12 14 AM IST