Bunnie has an interesting write up about AAAS’s Science publication “The MPG Illusion” he writes…

Here’s an interesting question.Suppose you had a household with two cars, and each car needs to be driven 10,000 miles per year. One car consumes 34 MPG, and the other car consumes 18 MPG. Since gas is expensive, you want to replace one car. Because of utility constraints, you have two choices:

• Replace the 34 MPG car with a 50 MPG car — a 16 MPG improvement
• Replace the 18 MPG car with a 28 MPG car — a 10 MPG improvement

Which car replacement would save you the most gas?
Normally, I consider myself not bad with quantitative comparisons like this, yet initially I picked the answer of replacing the 34 MPG car with the 50 MPG car based on the superior 16 MPG improvement. Another seemingly more analytical approach also leads to the same conclusion: 50 + 18 MPG giving a 34 MPG household average seems more efficient than 34 + 28 MPG giving a 31 MPG household average.

This very interesting article in Science, “The MPG Illusion” by Richard P. Larrick and Jack B. Soll at the Fuqua School of Business in Duke University (Vol 320, June 20, 2008, p. 1593), points out the mathematically obvious truth that gas used per mile is inversely proportional to miles per gallon, which means that you have a steeper slope at lower MPG ratings, and diminishing returns at higher MPG ratings.

 
More @ Bunnie’s site. At first glance it seems counterintuitive, but here’s an interesting thought…

Relatively small MPG improvements in the most gas-hungry vehicles pay off greater than larger improvements in already efficient cars (hence, it does make sense to offer tax breaks for modest improvements in SUVs versus tax breaks for hybrids, which typically replacing already gas-efficient sedans).