Want to get happy? Economist Justin Wolfers explains the best ways to spend your cash.+ READ ARTICLE
Check out our full interview with Justin Wolfers on the connection between money and happiness.
Check out our full interview with Justin Wolfers on the connection between money and happiness.
Just in time for prime barbecuing season, there’s been an across-the-board rise in meat prices. Many reasons have been cited for higher prices at the supermarket—lingering drought conditions tend to be blamed the most—but farm groups point to another culprit: you.
Strong consumer demand, especially for high-quality meats, is the primary reason, according to Bob Young, chief economist at the American Farm Bureau Federation. “Consumers are feeling better about themselves and their income situation and willing to pay up for good meat,” Young told The Atlantic recently. “I think that given the stronger demand, folks are going to find not quite the cut they want for the price they want. They might have to downmarket a bit.”
Here are five smart ways to cope without giving up your barbecue fix.
Buy in bulk. Maybe from the back of a truck. No matter if you’re at Costco, Walmart, or your local grocer, you’ll almost always pay a lower per-pound price for steaks, ground beef, and more by purchasing meats in larger packages—over 3 pounds, typically. Foodies and frugality gurus alike often recommend the strategy of buying a side of beef or an entire pig straight from a trusted farmer, though this isn’t always practical for folks who don’t have the freezer space or the desire to sharpen up their butcher’s skills.
One of the more odd and intriguing means of buying in bulk comes from a Washington-based company called Zaycon Foods, whose curious sales procedure—and terrific prices, under $2 a pound for chicken breasts—started attracting national attention more than a year ago. You won’t find the Zaycon brand at any store; instead, the company uses a no-middleman approach to business, in which customers place orders online and pick them up at a prearranged time from the back of a truck that’s waiting in, say, a church parking lot. The meat is never frozen; it’s taken from the farm and loaded onto the refrigerated trucks that wind up at pickup locations. “The products are as fresh as if you had your own farm, but without all the chores,” the Zaycon site explains. This is truly a buy-in-bulk operation, with huge packages you won’t see at the supermarket, or even Costco. An individual order of ground beef or chicken breasts is 40 pounds worth of meat.
The Seattle Times described the typical pickup scene: “The driver arrives at the designated parking lot, spreads out yellow parking cones to create a path for the customers’ cars, and hands off the boxes while checking names on an iPad.” Yet despite the quirkiness (or maybe partly because of it), Zaycon’s business has been thriving. At last check, Zaycon had roughly 1,300 drop-off locations in 48 states. Some 325,000 customers have signed up with the company around the country, up from just 84,000 registered users at the end of 2011.
Freeze now, eat later. It goes without saying that if you’re going to make use of Zaycon, or Costco’s meat section for that matter, owning a large freezer is in a must. Of course, smart grocery shoppers also stock up on meats for grilling when their favorite supermarket has a good sale, or there’s a great coupon circulating, rather than right before the July 4 weekend, when you’ll have to pay top dollar. Yet again, a good—and good-sized—freezer is in order, as is some basic knowledge about defrosting meat safely, without losing flavor.
Master of the art of leftovers. Today’s grilled steak is tomorrow’s shabu-shabu. Sure, you could simply heat up the leftovers and eat, but where’s the fun in that? If done correctly, leftovers won’t taste like leftovers, and they can be stretched out and incorporated into several days’ worth of eating. To spice things up, consult SuperCook and enter the foods and ingredients you have handy to see what new dish you can make. For leftover grilled meats, Real Simple recommends sprinkling barbecue sauce, a marinade, or just water over what you have, then wrapping it in foil and warming over indirect heat for a few minutes. Plain old reheating can dry out the meat.
Don’t be snobby about cheap cuts. Ground beef that’s 90% lean will be more expensive than ground chuck that’s 70% or 80% lean. And guess what? The fattier stuff offers far superior taste in a burger. Whereas burgers made with lean ground beef tend to be dense and dry, a 70% lean burger will be juicy and tasty. As a bonus, a lot of the fat drips off in the grilling process. As for grilling steaks, consider less expensive cuts like the skirt and hanger steak over the pricier strip or ribeye. When seasoned and cooked wisely, the cheap cuts won’t taste cheap.
Embrace meatless Monday. It’s an easy way to save a little cash and get a little healthier: At least once a week—it doesn’t have to be a Monday—go meatless. You can still fire up the grill. The Meatless Monday movement offers plenty of suggestions for meals planned around grilled vegetables. Quinoa and white bean burgers anyone?
It’s been a long two decades since the New York Rangers were in the Stanley Cup Finals. Now that Lord Stanley is within the Blueshirts’ grasp, diehard fans are paying big money for home game tickets.
Heading into Game 6 of the NHL Eastern Conference finals on Thursday night at Madison Square Garden, tickets on the secondary market were averaging about $800, with the “cheapest” seats selling for $350. Within hours of the Rangers defeating the Montreal Canadiens, sending the New York squad to the Stanley Cup Finals for the first time since Mark Messier led the Rangers to the championship in 1994, those $350 seats truly do seem cheap. So do the $800 tickets for that matter.
As of Sunday morning, it wasn’t yet determined who the Rangers would face in the finals. But, because either opponent (Chicago Blackhawks or Los Angeles Kings) would have home ice advantage, it was clear New York would host Game 3, 4, and (if necessary) 6 at MSG—and ticket prices for those games skyrocketed. At StubHub, the cheapest seats for Game 3 were going for more than $1,000. Meanwhile, tickets for Game 6, the last game of the series that the Rangers could possibly host, were starting above $1,500. According to ticket aggregation and research site TiqIQ.com, the average ticket price in New York ranged from $2,200 for Game 3 to more than $2,700 for a potential Game 6.
Prices haven’t changed much since it became clear the Rangers will be playing the L.A. Kings for the Stanley Cup championship. As of Monday, the cheapest prices for Games 3 and 4 at MSG started at more than $1,100, and Game 6 tickets were available for $1,700 and up.
Those are the least expensive tickets, mind you. Lower section seats near the glass for Game 3 were posted with asking prices of more than $7,000 apiece at SeatGeek.
As the Daily News recalled, the Rangers’ 1994 dramatic, long-awaited championship is still remembered fondly by fans, who had suffered through 54 years without a Cup:
“The waiting is over!” play-by-play legend Sam Rosen bellowed. “The New York Rangers . . . are the Stanley Cup champions! And this one will last a lifetime! No more curses. This is unbelievable.”
Today’s New York fans are hoping that the magic comes back to Madison Square Garden ice, and that their wait for another championship ends at the 20-year mark. Those lofty ticket prices demonstrate how badly fans want to see the team hoist the Cup. They also show how crazed Rangers fans are in general.
The same can’t be said of the fan base in Los Angeles, which isn’t exactly known as a hockey town. Last week, the Chicago Tribune noted that NBC, which is airing the games, must be rooting for the Blackhawks to make the Stanley Cup Finals because an Original Six Rangers-Blackhawks series would blow away a Rangers-Kings showdown in terms of TV ratings, thanks to Chicago’s diehard hockey fans.
Likewise, ticket prices probably would have been higher for a Stanley Cup home game in Chicago versus sunny Los Angeles. On Friday, tickets for Game 6 that night at the L.A. Staples Center, when the Kings could have closed out the series against the Blackhawks at home, were starting at around $120 on the secondary market. Now that we know the Kings are in, ticket prices on StubHub are starting below $500 for Game 1 in Los Angeles, or less than half the get-in price at New York’s Madison Square Garden. Tickets to a potential Game 7 in Los Angeles are available for just a smidge more than $1,000, “cheap” compared to the going prices in NYC.
According to two recent surveys, the majority of consumers walk around with little or no cash. Most prefer plastic for the sake of convenience and safety. There could be an unfortunate side effect, however, based on the theory that people spend more when making purchases with credit or debit cards rather than cash.
Last week, VoucherCloud, a UK-based deals and coupon site, released the results of a survey of 2,341 Americans indicating that “over half of American citizens (57%) ‘never’ carry cash, instead relying solely on credit and debit cards to pay for their daily expenses.” Only 10% of survey participants said that they “always” carry cash, and another 33% said that they carried cash “rarely” or “sometimes.”
Could this be true? Do the majority of American adults you pass on the street really have empty wallets? There’s reason for skepticism. Let’s start with the question that prompted the responses: “How often do you carry cash with you on an everyday basis?” Many may read this question as essentially asking, Do you always carry cash? That’s different than asking if you usually keep a few greenbacks in your pocket.
What’s more, another recent survey, from Bankrate, focused on the same subject but ended up with very different results. In its survey, which asked, “How much cash do you usually carry on a daily basis?” Bankrate found that only 9% selected the option “Don’t carry cash/does not apply.”
There’s no denying that folks carry a lot less cash than they used to. According to Bankrate’s data, more than three-quarters of people generally walk around with $50 or less: 40% usually have less than $20 on hand, 29% say $20 to $50, and 9% typically go cashless (or “does not apply,” whatever that means).
In both surveys, participants said they felt safer that way. The top reasons given in the VoucherCloud survey were “concerns over safety and the risk of theft” (65%) and “risk of losing my wallet and/or its contents” (53%). Women tend to carry less cash than men—77% of female respondents said they keep $50 or less handy, versus 61% of men—perhaps owing to the fact that women “may prefer to carry less cash than men so as to reduce the risk of being a target for criminal activity,” according to Bankrate chief financial analyst Greg McBride.
As for whether it’s wise to carry little or no cash, the surveys come to very different conclusions. When asked, “Do you spend more or less when paying by card instead of cash?” 84% of VoucherCloud respondents said they do more damage when spending with plastic. “While using payment cards rather than cash is a widespread modern phenomenon, because it is so quick and convenient, it can become a dangerous trend for some of us!” VoucherCloud’s Matthew Wood warned. “It’s much harder to keep up with what you’re spending as you don’t see the money leave your hands and, because it’s just a little piece of plastic, it doesn’t feel like a real exchange. It’s easy to get carried away.”
There’s plenty of research out there to back up this theory. Generally speaking, the idea is accepted that handing over cash feels more tangible and “hurts” more compared to quickly swiping a card. Many budget and personal finance experts recommend going cash only and maybe even freezing credit and debit cards in a block of ice as a strategy to limit one’s spending.
The Bankrate study, on the other hand, makes the argument that people today think of any cash as “petty cash” that will inevitably be spent quickly and carelessly. So it stands to reason that people don’t want to carry around too much. “If you’re carrying more, maybe you feel you have more, and you feel you spend more easily,” Joydeep Srivastava, a professor of marketing at the University of Maryland, told Bankrate. To many consumers, cash on hand is as good as cash spent. “As soon as you draw it from the ATM, it’s like you’ve already spent it,” said Srivastava. “You don’t feel that pang of guilt of spending it anymore.”
So which theory is true? If you’re trying to avoid unnecessary spending, should your primary mode of paying be plastic or cash? And by extension, is it best to carry lots, some, or no cash? The truth is, the answers probably vary a lot from person to person.
If you’re the type who is constantly piling up credit card debt or getting hit with overdraft fees on a debit card, it may be time to put the plastic on ice and limit yourself to cash-only expenditures. And it’s probably best to try to plan out your daily expenses and limit how much cash you carry around. Because if you have more cash than you need, you know you’ll just spend it.
Everybody knows that they should wear sunscreen to avoid sunburns and skin cancer. But apparently, you can’t just slather on any old product. These days, the risks of using the wrong sunscreen are said to include hormonal imbalances, nanoparticle inhalation, and the outside chance of setting oneself on fire.
Hey, we were just getting the hang of the traditional acronyms associated with sunscreens—SPF (sun protection factor), UVA, UVB (the two varieties of ultraviolet rays). Now we also have to think about oxybenzone, avobenzone, and titanium dioxide, just to name a few. Because many of these scary-sounding chemicals are, indeed, tied to legitimate health concerns, the question is not Should I wear sunscreen? but, to paraphrase a Slate writer, Which sunscreen won’t kill my kid?
In light of all the complications, the common-sense approach might just be to go with a well-known brand like Coppertone. In a post for the St. Louis College of Pharmacy, Abby Yancey, an associate professor at the school, explained that’s what she did, sending a double pack of Coppertone spray with her child to daycare.
Then Yancey got an e-mail from the daycare service stating that children should not bring sunscreens containing oxybenzone. Sure enough, there was oxybenzone in the Coppertone. And when Yancey went back to Target, there was oxybenzone in pretty much every sunscreen in the store. What’s so bad about oxybenzone? Yancey didn’t know, so she Googled it—yes, even pharmacy college professors have to Google this stuff—and found out that it’s absorbed into the skin, and some people “believe oxybenzone can cause hormonal imbalance” in users.
So there you are: Even pharmacists are flummoxed. Which would be reassuring if it weren’t also frightening.
There are plenty of other sunscreen-related concerns to freak out about not mentioned by Yancey. Like, oh, the possibility that using spray sunscreen could mean you’ll burst into flames, or at least get a bad burn—not a sunburn, a regular fire-type burn—if you’re near an open flame, such as a barbecue grill. That’s according to the FDA, which warns that because many of these products contain alcohol, which is flammable, “if you apply certain sunscreen sprays and then come close to a source of flame, you may risk the sunscreen catching fire and giving you a serious burn.”
As for some other basics, such as the proper distance for applying spray sunscreen—again, far away from any open flames!—the experts aren’t always on the same page. Yancey’s post recommends that users “be sure to hold the container 4 to 6 inches from the skin.” In the June issue of Health, meanwhile, Joshua Zeichner, M.D., the director of cosmetic and clinical research in the department of dermatology at Mount Sinai Medical Center in New York, says, “Hold the nozzle 1 to 2 inches away from the skin.” At least everyone agrees that you should rub in the sunscreen after applying. (Ideally, not while you’re also flipping burgers on the grill.)
Experts also tend to agree on something that seems rather disconcerting to the consumer who doesn’t want to spend more than three seconds picking out a sunscreen: A lot of what’s on store shelves should be avoided.
In the latest tests of 20 sunscreens by Consumer Reports, only two of the products provided the SPF protection claimed on their packages after the wearer was immersed in water. One of the sunscreens tested offered only half the claimed SPF after being in water.
After running its own tests, the Environmental Working Group (EWG) issued a guide promising that “Sun Safety Gets Easier,” while offering a dire warning about the majority of products on the market:
Two-thirds of the sunscreens in our analysis don’t work well enough or contain ingredients that may be toxic. American stores are still stocked with inferior products.
The EWG “Easier” guide features page after page of alarming info, including the idea that many high SPF claims are misleading (SPF100 isn’t twice as effective as SPF50), that Vitamin A, found in 20% of sunscreens, “may speed the development of skin tumors and lesions,” and that mineral sunscreens, which are generally zinc oxide and titanium dioxide-based, and which actually get a favorable rating from the EWG and most experts, are of concern because they contain nanoparticles, which are dangerous if inhaled. (Side note: The FDA has also issued warnings about the dangers of inhaling spray sunscreens. And Consumer Reports notes that zinc oxide and titanium dioxide “have been linked to reproductive and developmental effects in animals.”)
Even so, deep within the EWG guide, you’ll find the seemingly straightforward recommendation: “Zinc oxide is EWG’s first choice for sun protection.” Overwhelmingly, however, the EWG hammers home the point that every effort should be made to limit sun exposure and sunburn. “Don’t depend on sunscreen,” the study states. “People who rely on sunscreens tend to burn, and burns are linked to cancer.”
Likewise, there’s this shocking finding from CR:
Research shows that people who rely on sunscreens alone tend to burn more than those who stay in the shade and wear long sleeves.
Wow. Who would have guessed?
Seriously, for those who feel compelled to escape the shade occasionally, and who want to buy a sunscreen without having to get a PhD in chemistry, do the bare minimum and be sure the product has an SPF of at least 15, and that the FDA-approved phrase “broad spectrum” is on the label. That should help protect you from the most harmful rays. And take CR’s helpful, common-sense reminder to heart: “Using any sunscreen is better than using none.”
Automakers are being curiously quiet about the expanded use of an engine that’s lighter, more fuel efficient, and even safer than what drivers have come to expect under the hood. Why?
Because the type of engine in question runs on three cylinders, a breed that’s widely been considered “weird” and “wimpy.” The truth is that many of today’s 3-cylinder engines are neither.
The shift to smaller engines has been long in the making. By 2011, roughly half of new cars sold had 4-cylinder engines, up from around one-third in 2007. The average fuel efficiency for new cars has kept increasing, reaching over 25 mpg in recent months, and in order to hit the aggressive CAFE (corporate average fuel economy) goals established by the National Highway Traffic Safety Administration, vehicle mileage will have to keep inching upward.
One way automakers are trying to pump up fuel efficiency is by expanding the use of engines that have traditionally been associated with snowmobiles, mopeds, and lawn mowers. Manufacturers such as Ford, Nissan, and BMW have spent years developing vehicles with 3-cylinder engines, and now there are a handful of models with the teeny-tiny engines on the market. Among the options are the 2014 versions of the Ford Fiesta SE and the Mini Cooper, as well as the BMW i8, a sleek new hybrid sports car that’s expected to have a sticker price well over $100,000.
You probably haven’t heard much about the engines in these cars, however, which seems odd. Automakers love promoting every innovation and technological advancement. BMW, for instance, devotes ample website space to the i8’s design features that boost efficiency, including streamlined aerodynamics and the way “the passenger compartment is made of a carbon fibre composite, which proves to be an ingenious all-rounder: up to 50 % lighter than steel and approximately 30 % lighter than aluminum.” By contrast, very little attention is given to the fact that the gasoline engine under the hood is of the 3-cylinder variety. It’s buried low on one web page amid a barrage of jargon concerning the vehicle’s “BMW eDrive technology and a BMW TwinPower Turbo 1.5-litre, 3-cylinder petrol engine.”
As Automotive News recently explained, the 3-cylinder engine still has a “wimpy reputation,” generated by earlier, golf-cart-like 3-cylinder models. “Ford, BMW and other automakers are not drawing attention to the number of cylinders,” the Automotive News story noted. “That’s due in part to the reputation of three-cylinder engines. Instead, their message focuses on performance and fuel economy.”
The Mini Cooper and the Fiesta SE both get highway mpg ratings in the 40s, and they’re not underpowered, with 134 and 123 horsepower, respectively. The new Mini does 0-60 in 7.4 seconds, 2.3 seconds faster than its 4-cylinder-powered predecessor. (The new Mitsubishi Mirage and Smart fortwo, which also have 3-cylinder engines, have horsepower more in line with what most consumers would expect: 74 hp and 70 hp, respectively.) Three-cylinder engines are also lighter, which of course helps fuel efficiency, require fewer parts (which lowers manufacturing costs), and take up less space under the hood, which can improve safety because there’s less chance it will penetrate the interior in a front-end collision.
It’ll be up to cars like these, as well as high-tech 3-cylinder engines developed by Nissan, one of which weighs just 88 pounds and pumps an amazing 400 horsepower in the automaker’s batmobile-like ZEOD RC concept car, to convince consumers that a 3-cylinder engine is good for more than cutting the grass. Some auto insiders say that the assumptions most drivers make about these engines are outdated, and that the engine’s reputation is bound to change once word spread about the advances that have been made.
Jalopnik declared that 2014 will be the “year three-cylinder engines stop being weird,” and, presumably, wimpy. “It’s time for three cylinders,” Jalopnik’s Jason Torchinsky proclaimed. As for the skeptics and naysayers, who are stuck with the perception that 3-cylinders can’t adequately power anything bigger than a scooter? “Remind your wanna-be gearhead co-workers that most of these modern 3-cylinders have power pretty damn close to V8s in the mid-1970s.”
You want bread with your meal? Then be prepared to pay up. More and more restaurants around the country are upending decades of tradition by doing away with the bread basket.
The obvious reason that free bread is disappearing—or being offered upon request instead of showing up automatically—is that it’s expensive. According to one baker interviewed recently by the Boston Globe, “a restaurant used to be able to get a roll for 10 cents. Now it can be 50 or 55 cents. Bread used to be cheap, but now it’s a serious cost.”
Even worse, restaurateurs are facing the proposition of paying more for bread during a time when diners are less likely to eat it, thanks to dietary restrictions and trends—in particular, the two big pushes to eliminate or restrict carbs and gluten. These shifts in eating habits don’t appear to be going away anytime soon. The National Restaurant Association trade show in Chicago last week featured no fewer than 75 booths with gluten-free products.
In San Francisco, where it’s become common for restaurants to either charge for bread or offer it only upon request, the new policies are promoted as a means to limit unnecessary waste. “I’m all for” it, wrote the San Francisco Chronicle restaurant critic Michael Bauer, because in the past, much of the free bread wound up in the trash, untouched. “Why waste bread if the diner really doesn’t want it?”
Baby boomers, who have lived for decades with complimentary carbs, seem to be much more upset than younger generations about the disappearing act. The Arizona Republic, which last fall noted the phenomenon at restaurants in the retiree-heavy Phoenix area, quoted one 51-year-old man who spoke for many when he said the change was a way for a restaurant to “chintz out.” A 20-year-old customer, on the other hand, felt quite differently: “I usually prefer that [restaurants] don’t give me bread because it fills me up.”
For restaurant owners, the decision to bread or not to bread tables comes down to figuring out a way to keep customers happy while maximizing sales and limiting unnecessary costs. Sensitive strategizing is needed to avoid putting off patrons.
Earlier this year, The Record (N.J.) reported that many restaurants in northern New Jersey have either stopped placing free bread at tables or deliver it only by request after customers have placed their orders. Why the latter? Because restaurants want people to order when they’re hungriest, and customers are less likely to spring for appetizers and big entrees if they’ve already started chowing down on bread.
“If we can’t sell plates because people are filling up on bread, it’s a financial burden,” said one New Jersey restaurant owner. “We’re in the business to sell food, not to sell bread.”
One sneaky strategy, employed by Abby Lane Food & Spirits in Boston, involves subbing homemade spicy barbecue blue potato chips for free bread at tables. The chips cost a fifth as much to produce as bread, and they are gluten-free, the Globe reported, which works out brilliantly for the restaurant. Even better—for the restaurant—because the chips are so salty, customers tend to spend more on drinks.
Date labels on food were created with consumer safety in mind. But some of the labels result in confusion—and tons of perfectly safe food tossed out for no good reason.
We hear regularly that Americans waste a colossal amount of food. One popular factoid has it that we wind up throwing out 25% of the food that comes into our homes. Over the years, experts have pointed out that Americans aren’t really trying to be wasteful; instead, we’re often misled by confusing expiration dates, or rather what we think of as expiration dates. Sites such as ShelfLifeAdvice.com try to clarify the meaning of terms such as “use by” and “sell by,” with the general takeaway being that you shouldn’t necessarily toss food out when the date stamped on a product has passed.
We Americans are hardly alone in the widespread practice of unknowingly wasting food—and in wasting it directly because of confusing labels. Reuters reports that researchers in Europe are presenting a paper on Monday arguing that it might be best for some labels—specifically the “best before” guideline—to be eliminated for certain products. The poor understanding of food labels is credited as part of the reason that an estimated 100 million tons of food is wasted annually in Europe, and that some 30% to 50% of food that winds up in supermarkets is thrown out.
Whereas the “use by” label is applied to foods that pose a health risk if consumed beyond the date listed, “best before” guidelines tend to be an indication of quality. Many foods stamped with “best before” dates have extremely long shelf lives—canned foods can be fine for years—and they can be eaten safely long beyond the date listed. It’s just a matter of their quality supposedly diminishing once that date has passed. Consumers often don’t make this distinction, and simply throw food away as soon as it seems to have “expired.”
When viewed on a global scale, food waste is not simply a monetary issue, but an environmental and humanitarian one as well, so officials in Europe are reconsidering the usage of “best before.” For many foods, it may be best to get rid of the label entirely.
The secret lies in making it crystal clear how much they’ll save in gas costs over the long haul.
In every car dealership, a new vehicle for sale is required to have an EPA car label slapped on the window. The labels are loaded with numbers and ratings and have a dozen different features, including the estimated fuel economy (with city and highway breakdowns), the estimated annual fuel cost for operating the car, a fuel economy and greenhouse gas rating, a smog rating, and a smartphone QR code that can be scanned for additional information.
But a new study by Duke University researchers makes the case that one critical bit of information is missing from the labels. The labels today show how many gallons of gasoline a vehicle uses over the course of 100 miles of driving, and they also provide an estimate for annual fuel costs, based on a rate of $3.70 per gallon and 15,000 miles of driving per year. Researchers say it would be helpful—for consumers and the environment alike—to do some more math for potential buyers and show how much owners can expect to spend on gas for the long haul. Like, say, 100,000 miles.
In the study, participants were presented with a variety of different scenarios and asked to pick the vehicle they preferred. For instance, one group was asked to choose either: Car A, which costs $18,000 and $20 in gas over 100 miles of driving; or Car B, which costs $21,000 and $16 in gas over 100 miles of driving.
Another group was asked to choose either: Car A, which costs $18,000 and $20,000 in gas over 100,000 miles of driving; or Car B, which costs $21,000 and $16,000 in gas over miles of driving.
Both scenarios are essentially the same: The upfront costs and fuel economy in Car A and Car B are the same in both scenarios. But guess which scenario resulted in way more consumers choosing Car B, the more fuel-efficient and cost-effective option? Yep, the second hypothetical, which did the long-term math for consumers and demonstrated that an owner would save $1,000 over the course of 100,000 miles by choosing Car B over Car A.
In fact, in the many scenarios presented—including several instances when the vehicle with better mileage didn’t pay for itself in gas savings—would-be buyers were most likely to select the more fuel-efficient vehicle when the costs were shown over the course of 100,000 miles. That doesn’t mean that the average consumer would actually buy a fuel-efficient vehicle if it didn’t make financial sense.
“People are very sensitive if the vehicle paid for itself or not,” Adrian Camilleri, one of the study’s authors, said in a phone interview. “People don’t like cars that don’t pay for themselves. But they show the greatest interest in more fuel-efficient cars when they’re shown the gas costs over 100,000 miles.”
Overall, in the sum total of all scenarios—including, again, some in which the more fuel-efficient car didn’t pay off—among the participants who selected the more fuel-efficient car, 61.6% did so when shown the gas costs over 100,000 miles, versus 46.6% when gas costs were simply shown over 15,000 miles, like they are currently on new-car EPA stickers. Specifically, when given costs over 100,000 miles, participants chose the more fuel-efficient model 87% of the time when it paid for itself, versus 36% when the gas costs savings didn’t pay off. But when shown costs over 15,000 miles, participants chose the more fuel-efficient model 73% of the time when it paid for itself, versus only 20% when the fuel-efficient car didn’t pay off.
What may come as somewhat of a surprise is that showing consumers gas costs over 100,000 miles significantly increased the odds of someone choosing the car with better mileage even when the choice didn’t result in an overall cost savings. “What we found is that many people want to buy more fuel-efficient cars when they’re close to paying for themselves,” said Rick Larrick, a Duke management professor and one of the authors of the study, published in the spring issue of the Journal of Public Policy & Marketing. “That’s when their sense of environmentalism kicks in. They might not be willing to pay a large premium, but they realize how close the difference gets when they see gas costs over 100,000 miles.”
Larrick said that consumers may also do a little more math for themselves and see that if they drive the car well over that marker—the life of many cars nowadays extends well over 200,000 miles nowadays, after all—that the vehicle with better mileage will, in fact, make more sense financially.
As for the EPA stickers, Larrick thinks that instead of adding the estimated gas costs over 100,000 miles to the already clogged label, it would be best to substitute it in there for one or more of the other fuel cost data points. “They already have the annual fuel costs and the amount drivers would save over five years compared to the average vehicle, which is pretty redundant,” said Larrick. “There’s a way to simplify this. The cost over 100,000 miles is just a more important metric.”
Deep in your heart of hearts, you probably know you could unload the majority of your possessions without getting too upset.
Could you get rid of most of your stuff and still be happy? The majority of consumers polled in a new study say they absolutely could. The study, titled “The New Consumer and the Sharing Economy” and conducted by Havas Worldwide, surveyed more than 10,000 people around the globe. The results offer some interesting takeaways about consumption—and overconsumption. Among them:
*Half of all consumers say they could live happily without most of the items they own.
*Two-thirds say they get rid of unneeded possessions once a year, if not more often.
*70% believe that overconsumption is putting the planet and society at risk.
The factoids mesh with plenty of previous research that indicates, for example, the average American home is cluttered with possessions (and our incessant yearning for stuff is stressful and unhealthy), and that the average American child receives some 70 new toys per year. Other research points out that happiness comes largely as a result of fun experiences and relationships with other people rather than the gathering or more and more “stuff.” Money has been correlated with happiness, though how we spend it has a lot to do with whether wealth helps make one content or miserable.
It probably isn’t necessary for researchers to delve into reams of data in order to deliver many of these official “revelations.” Down deep, most of us generally know that we don’t really need much of what we own, and that getting rid of some, if not most, of our clutter certainly wouldn’t be the worst thing to happen. (“Hoarders” anyone?) On the one hand, the new study data demonstrates that most people are fully conscious of the idea that overconsumption is bad, and that one’s happiness isn’t dependent on “stuff.” On the other hand, while it would seem to be good that the majority of people sell, recycle, or otherwise get rid of unneeded possessions at least once annually, the fact that people are swimming in unneeded possessions in the first place is a pretty clear indication that the average person regularly acquires more than he needs.
The title of the new study features the term “Sharing Economy,” which applies to businesses such as Airbnb, Lyft, and SideCar, among many others. What they all have in common is that they’re based on the idea that, for many consumers, it makes more sense to “share” (usually for a fee, of course) rather than buy a car, ride, vacation rental, dress, gadget, or almost anything else under the sun. Another of the study’s factoids shows that most people are in favor of sharing:
*65% agreed with the line “Our society would be better off if people shared more and owned less.”
Because sharing economy operations are new and often viewed as disruptors—if not likely destroyers—of traditional businesses like taxi companies and hotels, they routinely find themselves in the government’s crosshairs and may very well be subjected to increased restrictions and regulations in the future. Nonetheless, it seems like the sharing economy’s future is bright, if for no other reason than consumers largely embrace the concept.
“For a number of years, we’ve tracked the shift away from wasteful spending and toward a more mindful approach to consumption, but what we’re seeing now is much more proactive and hands-on,” Andrew Benett, global CEO of Havas Worldwide, which conducted the new study, said in a press release. “They’re getting involved in the consumption cycle by contributing to the funding or even the creation of products they want and by reselling or renting out their unneeded possessions. They’re creating new formats for the exchange of goods. And every step of the way, they are practicing ‘less is more,’ and savoring their ‘less.’”
Consumers who own stuff like the sharing economy because it gives them a way to get some use—and ideally, some money—out of the possessions that otherwise might be rarely unused, gathering dust and taking up space. And consumers who choose to own less like the sharing economy model because it gives them a way to get their hands on more stuff without having to actually take the plunge and buy. They also don’t have to worry about finding space to store this stuff because, remember, it’s not their stuff. They get to give it back.