A Cash for Clunkers Review

According to Toyota Tops List of Cash-for-Clunkers Winners (NY Times), 690,000 new vehicles were purchased with money from the Cash for Clunkers program.  On average, new cars got 25 miles per gallon (mpg) while "clunkers" got 16 mpg.  If the average person in the US drives 15,000 miles/year, then new cars will save 337.5 gallons of gas a year (937.5 gallons for "clunkers" and 600 gallons for the newer cars).

So did the Cash for Clunkers program pay off?  Lets try a back of the envelope calculation.

If we estimate that the "clunkers", without the program, would have been replaced within five years on average, then the total gas saved would be:

690,000 cars x 337.5 gallons saved per year x 5 years = 1,164,375,000 gallons saved

or about 1.16 billion gallons of gas saved.

Since about $2.9 billion was spent, that means that for every gallon saved, it cost the federal government about $2.49.  Increasing the average replacement time decreases the cost per gallon, while decreasing the replacement time raises the cost per gallon.

With gas costing $2.62 a gallon on 8/24 (see doe.gov), this is a slight savings.  The savings would grow should the price of gas go back to its high point of $4.00 in July 2008 or even higher when peak oil really kicks in.

Some (1 , 2) have estimated the true cost of a gallon of gas to be significantly higher due to such factors as the subsidies the government gives to gas, protecting the oil supply in the Persian Gulf, lost time in traffic and the environmental cost.  Estimates of the true cost of a gallon of gas vary between $5 and $15.  At those prices, Cash for Clunkers program was quite a good investment. 

However, whether the Cash for Clunkers program was as efficient at cutting our oil usage and pollution as other approaches such as home energy efficiency improvements, or increased ride sharing, public transit or bike paths remains to be seen.

Data point: Diversity among Boston-area Tradable Card Gamers

I took my son and his friend to a Yu-Gi-Oh! sneak-peak and Magic game day at Pandemonium Books & Games this last weekend.  They had fun playing the game with each other, another friend and a few of the other folks there.

One thing I noticed was how the composition of the players both confirmed and challenged the perceptions that such science fiction and fantasy oriented gaming is a white-male only activity.

It was certainly true that the players were overwhelmingly teenagers (or at least in their early 20ies) and of the seventy-five people I counted there, only four were women.

However, the ethic breakdown, albeit from my subjective observation skills and the few conversations I had, was:

8 African descent

28 Asian descent

18 European descent

10 Latino descent

1 Mixed descent

I found the ethnic distribution (though not the gender distribution) pretty refreshing, certainly compared to my work environment and even the Green-Rainbow Party.  While I was clearly in the top 10% in terms of age, I didn't feel much out of place.

I do not know if this data point reflects the true diversity of this group, but I found it interesting nevertheless.

The rich continue to get richer

Paul Krugman calls out the latest income inequality numbers from Emmanuel Saez.  The nearly thirty year trend of increasing income inequality got noticeably larger during the Clinton & Bush II years.  And yes, that is the % of income claimed by the wealthiest 1/10000th of the US population.  The wealth values are no doubt even higher.  These values only go up to 2007, but my guess is that 2008 was even higher, and possibly 2009 as well.


If we look at just the top 1%, they claim 23% of all income and followed a similar path as the top 1/100%, though not as radical.  The top 1%, by the way, represents families with an annual income above $398,900 in 2007.  Who says we cannot pay for health care and close the deficit by taxing these folks more.

Download the data and graphs in Excel format.  Table 2 has a nice summary.