Stock exhaust systems are intended to work in a wide range of driving conditions and generally are not very efficient. Car manufacturers compromise performance for other considerations, such as ease of production and cost.
Typically a single log-type manifold on each cylinder bank connects through a "Y" pipe into a single catalytic converter and muffler, with an overall pipe diameter of 2" or even less. OK for a grocery-getter, but not when you're looking for low-end power, mid-range acceleration, top speed potential, and yes, even better fuel economy.
Anything that causes turbulence or back-pressure in your exhaust system reduces the power that intake or engine modifications can create.
Stock manifolds contribute heavily to turbulence because all the exhaust dumps directly into a single tube. Tubular designs separate each cylinder's exhaust pulse, reducing the possibility that spent gases will flow back into an adjacent cylinder and contaminate the incoming fuel and air mixture. This is especially crucial when you're running a cam with more overlap.Simultaneously, tubular headers reduce back-pressure, allowing more fuel and air to enter the cylinder's intake stroke. Both these factors add up to more combustion efficiency, i.e., more power to the wheels. Headers will give you a noticeable performance gain; even when connected to an otherwise stock exhaust system. But it only makes good sense to look at all the components from front to back. Certainly, restricting the headers in a single pipe system defeats the reduced back-pressure you're trying to achieve.
One of the most critical decisions to make when you're building a performance exhaust system is pipe size. Bigger is not always better ,it's very important that the pipe diameter be sized to the application and that it remains the same from the collector to the end of the tailpipe. Changing the diameter up or down within the system will "confuse" the exhaust by creating turbulence and excessive backpressure.
Basically, as a rule of thumb, if your intended use is strictly street, for cruising and maybe as an everyday driver, then 2.5" will be adequate,,,,,,,,,, unless you have 500 HP or more! For the strip, if you have a power plant rated around 425 or more realistic horsepower, then the 3" system would be the way to go. Powerplants with few horses just will not benefit from the larger 3" exhaust although 3" tailpipes showing from behind the rear wheel or under the bumper will make quite an impression.
If you're not sure of the horsepower rating of your powerplant, but have raced at the dragstrip, then any 1/4 mile ET's in the 12.40 - 12.70 range or quicker would benefit from the larger 3" exhaust versus a good 2.5" mandrel bent system.
A common misconception is that the larger the diameter, the better the system. But bigger isn't always better. Systems that are too large in diameter can actually hurt performance. As a general rule, switching to a performance system that is 1/4" to 1/2" inch larger than stock will provide you with the best horsepower increases. To determine which pipe diameters will be best for your system, decide what RPM range your engine will operate at, most of the time. Smaller diameter pipes will produce low- to mid-RPM torque. Larger diameters produce mid- to high-RPM torque.
Bigger isn't always better. Systems that are too large in diameter can actually hurt performance. Improved flow is what you need. Having large diameter pipes isn't what's cool. Going fast and making horsepower is.