What we really need is an 18 cent coin

Time for the random Friday science story, though this one is more math than anything else.

A mathematician at the University of Waterloo in Ontario, Shallit recently analyzed the average handful of change and has devised a clever way to reduce its size. Getting rid of the 1-cent coin, a plot advocated by numerous antipennyists, would certainly help, he says. But Shallit's own scheme for reducing loose change involves the creation of an entirely new coin. What the United States needs, he says, is an 18-cent piece [...]

Using those parameters, Shallit calculated that the average U.S. transaction produces 4.7 coins in change. How to reduce that burden? If we got rid of the dime and replaced it with an 18-cent coin, Shallit determined, the "cost" of the average transaction would drop from 4.7 to 3.89 coins. A system of coins worth 1¢, 5¢, 18¢, and 29¢ would have the same effect. Should we wish to keep the dime and simply add a fifth denomination, the best coin to add would be 32¢, for an efficiency of 3.46. Even better, if we kept the dime and actually used the half-dollar, then added an 18-cent coin to that mix, we'd gain maximum efficiency: You'd get back a mere 3.18 coins per transaction.

4.7 coins in change per transaction. Can you believe it??? That's outrageous!

Yeah, yeah, some of you will advocate ditching the penny.

The most effective way to reduce the amount of spare change is to eliminate the 1-cent coin and simply round prices down or, more likely, up to the nearest 5-cent value. Shallit calculates that in a penny-less world, the average number of coins in any transaction would drop from 4.7 to just 2.7—a whopping 42 percent reduction.

But I'm not looking for the most "effective way" to reduce my change load, but the most elegant.

And can you imagine anything more elegant than an 18 cent coin? Now all we would need is a name...

Posted October 10, 2003 01:28 AM | Comments (101)