Never thought about MPG for a smaller pipe but i can tell you this:
On motorcycles the exhaust length and dia. are very critical to how the bike runs. Longer/smaller pipes give better low&mid range torque while short "drag shorties" give a higher and narrower HP curve.
While most car exhausts are much longer, and many consider them to be too long to affect things, I'm not convinced they don't have some effect. I just think at the normal length they match s many 2nd and 3rd frequencies, tract tuning doesn't matter as there is still a matching wave length. Others feel at those lengths the waves have died out and turned into nearly steady flow.
Now changing the header size & length will have an affect, lowering and flattening the HP curve shouldn't change the FE but the added torque may cause you to lift off the throttle more.
