An Australian cycling magazine claims that you could save $3.5 million over your lifetime if you ride instead of owning a car. They say that their calculations are solid and we have no reason to doubt them, but this is not a story about how great it is to ride a bike.
Their calculations assume that you save every cent you don’t spend on a car in an account earning 6% interest. Unsurprisingly, the magic of compound interest — and probably a complete absence of discounting the value back to today — gives huge savings over a forty year career. Do cyclists really save all that money? No. Is it misleading to add interest on top of the savings and not discount the value back forty years to today? A bit. Does this really tell us much about the benefits of bike commuting? Not really, it’s just a story about how easy it is to make big numbers with daft counterfactual assumptions. Are they more misleading than most headline numbers in the newspapers? Probably not.