Wednesday, April 02, 2008

Tim Haab asks an interesting question

How much gas is your time worth?


In a typical family sedan, every 10 miles per hour you drive over 60 is like the price of gasoline going up about 54 cents a gallon. That figure will be even higher for less fuel-efficient vehicles that go fewer miles on a gallon to start with...

Engineers at Consumer Reports magazine tested this theory by driving a Toyota Camry sedan and a Mercury Mountaineer SUV at various set cruising speeds on a stretch of flat highway. Driving the Camry at 75 mph instead of 65 dropped fuel economy from 35 mpg to 30. For the Mountaineer, fuel economy dropped from 21 to 18.

Over the course of a 400-mile road trip, the Camry driver would spend about $6.19 more on gas at the higher speed and Mountaineer driver would spend an extra $10.32.

So my inner economist asks: Is it worth it to drive 10 mph slower to save $6.19-$10.32?

According to my calculations that 400 mile trip takes an extra 49 minutes. So another way to ask the same question is: are you willing to pay $6.19-$10.32 to save 49 minutes of travel time?

Or yet another way, is your time worth more or less than $7.57-$12.64/hour?

Additionally, one could factor in the chance of getting a ticket on this given stretch of highway, add this cost (both time and money)and divide by the new amount of time needed to travel. Then if you really want to take things a few steps too far, you could discount the future (higher) value of insurance payments incurred by getting a ticket (multiplied by the possibility of getting pulled over in the first place), and then add in some sort of weight for risk aversion.

But at the end of all this it is still true that the SUV driver values comfort and carrying capacity more than the additional fuel costs, or he/she would have bought a Camry in the first place, or perhaps even a PRIUS!
I'm really glad you did al that math for us. I've always wondered how much going faster would cost me in gas. I'm gonna go with no my time is worth more than that and i would rather not think about it. Here's something i've also wondered about, how long you have to wait with your car in idle until it would have saved you gas to turn off the car and turn it on again. They recently put something in the piolog about this. I don't have a copy but someone was reading it to me and it sounded way off. Do you have any info on that?
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