Car manufacturers should change the way they advertise the fuel efficiency of their vehicles, to make the environmental impact of buying a new car easier to understand, researchers said yesterday.

Turning a car's fuel efficiency on its head by stating it in "gallons per mile", instead of "miles per gallon" helps potential customers choose the greenest option when they upgrade, said the team at Duke University in North Carolina.

In The MPG Illusion, published in the US journal Science yesterday, Richard Larrick and Jack Soll at the university's Fuqua School of Business describe how the use of miles per gallon is misleading and causes people to grossly misjudge the environmental impact of upgrading to a new car.

The two management professors stumbled across the problem while working out the true fuel efficiency of different cars in a car-sharing scheme. They found people often believed - mistakenly - that a 10mpg improvement in fuel efficiency always corresponded to the same fuel saving.

"The reality that few people appreciate is that improving fuel efficiency from 10 to 20mpg is actually a more significant saving than improving from 25mpg to 50mpg for the same distance of driving," said Larrick.

Likewise, replacing a car that does 10mpg with one that appears only slightly more efficient at 11mpg saves as much fuel as upgrading from a 33mpg car to a 50mpg car.

To work out new fuel efficiencies, Larrick calculated how many gallons of petrol a car would burn over 10,000 miles. A 10mpg car would burn 1,000 gallons, while a 20mpg car would burn only 500 over the distance. In comparison, a 25mpg car would use up 400 gallons, while a 50mpg car would use 200. Despite most people's first impressions, the fuel saving is 2.5 times greater in the first instance.

The finding suggests that people who use two different cars equally will always save more on fuel by improving the least efficient car.

In a series of experiments, Larrick and Soll asked volunteers to study a series of cars whose fuel efficiencies were given in miles per gallon. When they were asked which upgrade would save the most fuel, they invariably made the wrong decision.

In one test, most people believed that upgrading a car from 34mpg to 50mpg would save more petrol than replacing an 18mpg car with a 28mpg vehicle. In fact, the latter saves twice as much fuel.

"Miles per gallon is misleading and can play tricks on our intuitions," said Soll.

"It made us realise that low-efficiency cars really use a tonne of gas and drive overall consumption and that's why even small changes in low mpg cars makes a big difference," said Larrick.

"Changing the way we express efficiency would help the car companies make clear to buyers where there are gains to be made."

When the tests were repeated using gallons per 100 miles, the volunteers correctly picked the greenest option from those available.

"There are significant savings to be had by improving efficiency by even 2 or 3mpg on inefficient cars, but because we communicate in miles per gallon, that saving is not immediately evident to consumers," said Soll.

The authors call on car manufacturers and consumer publications to list efficiencies in terms of gallons per 10,000 miles driven, making it easier to see how much petrol a car might use in a typical year of driving, and how much fuel and money could be saved by opting for a more efficient car.

According to the US department of energy, a Prius can cover 48 city miles per gallon, while a Mercedes Benz G55 SUV, will cover only 11 miles on the same amount.

David Bonilla, an energy expert at Oxford University's transport studies unit, said the move was along the lines of other countries, which already state fuel efficiencies in litres per kilometre, and EU plans to describe vehicle efficiencies in terms of the amount of carbon dioxide released per kilometre.

"Fuel efficiency isn't a top priority for most people when they are buying a new car, but that's beginning to change because of high oil prices and environmental awareness," he said.

"Sales of cars with low fuel efficiencies have already dropped in the US and there's evidence over the past year that people are shifting to more fuel efficient vehicles. We can expect that to happen here too."