For years vehicle makers in India have promoted fuel efficiency by communicating how many kilometres per litre their vehicle delivers.
But can people who care about fuel efficiency be able to easily calculate the cost of fuel over the lifetime of the vehicle, or over a long period of, say, five years, when fuel efficiency is measured in kilometres per litre (kmpl)? Consider this.
If you were to buy a car that gave 15kmpl and cost ₹5 lakh, and were comparing it to another car that gave 12kmpl and cost ₹4.5 lakh, how would you make the decision? Most people think that the fuel efficiency between a car that gives 15kmpl is not that significantly different from a car that gives 12kmpl.
Behavioural science studies find that making such calculations is not intuitive for most people. So they tend to use simple rules of thumb to make quick decisions, which leads to biases and errors. Read More