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Thursday, December 19, 2013

The Best Car Ever

Guest post by Blake Grady, edited by the prof with comments from Econ 244 participants. Original was from May 17, 2013.
This is one I had in draft form but apparently forgot to publish last spring – my apologies to Blake and commenters

Tesla Model S

Consumer Reports recently gave the Tesla Model S a score of 99 out of 100, and other media outlets immediately began proclaiming that the car could be the best vehicle ever made. A small number of journalists responded by arguing that the entire idea of a "best car" simply doesn't make any sense.

...the entire [ratings] concept ... makes no sense

Does this vehicle look comparable to the Tesla Model S?

I agree with them, but I drew an even more extreme conclusion from reading about the car and the consumer reports rating system: the entire concept doesn't make any sense. People buy cars for remarkably different reasons: perhaps a Range Rover to drive around Manhattan in isolated comfort, or the same Range Rover to tow horses to a show. In this case, even with the same vehicle, it would receive two different ratings: one of the New Yorker and one for the horse owner.

This issue becomes worse when trying to compare different vehicles. Comparing an F-350 pickup to a Tesla Model S on the same rating system is almost impossible. The question then becomes why do journalists use this system? My guess is that reviewers have found that people find the ratings systems more interesting when they can compare all of the models together, even if they make less sense that way.

The prof pointed out that such rankings have two audiences. One is the car guys (and gals) who like to argue about features and driveability and styling. Ratings are great to spur discussions over beer (or, perhaps for a Tesla, wine). The other are car purchasers, who are likely to look at sites that compare cars within the same segment. For them, these grand competitions and “best of the best” ranking games are not meaningful, as you point out. However, cars are an aspirational purchase, and “halo” cars and the general image of a brand matter. If nothing else, you want all your cars to have decent to good ratings…

Tyler Kaelin agrees as one of those car guys. Although I read car reviews all the time, my parents (people who have actually bought cars before!) could care less. Their concerns are general reputation in terms of quality and reliability, price, and the test drive. Where does that leave the purpose of these reviews, I begin to wonder? Maybe they are part of that “general reputation.”

Griffin Cook notes that a unified rating system makes sense given a very specific [strong!] requirement: that it is based on the “drivability” of the car and ignores function. In this sense, the slower, less fuel efficient F-350 is a lesser car then the Model S. While a pickup truck is obviously meant to serve a different function, the point of a view of a driver behind the wheel matters. However, Consumer Reports is not that narrowly focused, and their subjective reviews do not provide consistent information for potential buyers who consider their opinion to be authoritative.

Daniel Tomm seconded Blake: the rating system does not make sense if comparing an SUV to a sedan. It would be fine if they had different classes for each type of vehicle (i.e. SUV, light truck, heavy truck, sports car, sedan). Each vehicle serves its purpose — though I do not know what category concept cars such as the ME.WE would fall in. Personal preference makes a difference and like Tyler and the professor said, the car purchaser has the ultimate say. I know when I was first looking at cars, trucks were out of the question because my father thought they were impractical and I would never be lugging around logs or construction equipment. In terms of reviews I never truly looked at “best of the best” but if I saw a car I liked and a friend drove it I would ask their general opinion in order to get real feedback from someone who was not trying to sell me the car.