Cost-benefit analysis of Rear-view video on cars
The Obama administration wants to add about $200 to the price of every car and light truck in the US.
Suppose that a value of life is $4 million (probably an over estimate for the elderly and young people killed accidentally here) and that the average injury is $50,000 (definitely an overestimate since most injuries tend to be very small), the total cost from these accidents is $1.6 billion. There are about 12 million cars and light trucks sold in the US this year. In that case, any cost over $133 per car would produce costs greater than the benefits. If the average injury costs $10,000, any cost of the rear-view cameras over $82 is too much.
The LA Times notes that Ford says the systems add about $400 to the price of their cars.
A Toyota Camera costs about $239.95, a Gray monitor added another $265.95, and a color monitor adds $369.95.
The WSJ notes:
The $2.7 billion at $200 per car implies that 13.5 million cars will be sold each year. The 12 million is probably low given that sales are probably still low from the recession.
The Detroit News makes the right point:
The numbers above assume that adopting these cameras will eliminate deaths and injuries from cars backing over children. That is obviously incorrect. Even if half of them are avoided, the regulation will probably be surprisingly successful.
Such technology currently boosts the price of a car by as much as $200. But administration officials said the added cost is justified because the technology could potentially halve the number of deaths and injuries each year attributed to "back over" crashes, currently at about 207 and 15,446, respectively. Such crashes disproportionately affect children and elderly people. . . .
Suppose that a value of life is $4 million (probably an over estimate for the elderly and young people killed accidentally here) and that the average injury is $50,000 (definitely an overestimate since most injuries tend to be very small), the total cost from these accidents is $1.6 billion. There are about 12 million cars and light trucks sold in the US this year. In that case, any cost over $133 per car would produce costs greater than the benefits. If the average injury costs $10,000, any cost of the rear-view cameras over $82 is too much.
The LA Times notes that Ford says the systems add about $400 to the price of their cars.
The rear-view camera system adds about $400 to the price of a Ford. . . .
A Toyota Camera costs about $239.95, a Gray monitor added another $265.95, and a color monitor adds $369.95.
The WSJ notes:
The rule could cost the auto industry between $1.9 billion and $2.7 billion a year . . .
The $2.7 billion at $200 per car implies that 13.5 million cars will be sold each year. The 12 million is probably low given that sales are probably still low from the recession.
The Detroit News makes the right point:
No matter what system you choose or the government forces carmakers to install, the most important thing to remember is that technology will never replace a careful driver. It may assist us, make us a little safer and enhance the driving experience, but it cannot replace a driver aware of his or her surroundings. . . .
The numbers above assume that adopting these cameras will eliminate deaths and injuries from cars backing over children. That is obviously incorrect. Even if half of them are avoided, the regulation will probably be surprisingly successful.
Labels: Regulation
posted by John Lott at 1:20 AM
6 Comments:
Back up cameras are well worth $200. Just ask anybody who has backed over their own toddler, they'll tell you.
I don't have any toddlers, and I don't want to have to pay for a camera. Besides, what's to ensure that people actually look at the video screen when they back up? How about another camera in the car with face recognition to ensure that the driver's face is pointed at the video screen! Where does the nanny statism end?
Let those with children buy such a device if they decide that they need to have one.
Using the government to force a one-size-fits-all solution on everyone is stupid. The commie libs want to let the free market to decide nothing, while they allow themselves to decide everything, including how to spend other people's money. I'm tired of picking up the tab for other people's not so good intentions. Spend your own $200, Rosey, and get your grabby commie fingers out of MY wallet!
Markie Marxist sez: "Cost-benefit analysis of rear-view video on cars? There's no cost-benefit analysis needed. It costs American consumers more, so that benefits us Marxists. Anything that we can do to drive up the cost of American capitalism is well worth it. That's just common communist sense."
I would say that making it an OPTION on any new vehicle for $200 would be wonderful. Making it a REQUIREMENT should be criminal.
Chas,
I am a Libertarian, and a fiscal conservative, not a commie. I also have no toddlers, because they survived the toddler phase without me backing over them. I have a Honda Ridgeline, and the rear visibility is horrible. A camera is in fact an option, but it's $2,000 from the dealer, because you have to buy the navigation system to get it. After market is an option I have considered it, but I don't really want the dashboard ripped up. I would love a $200 camera option.
I don't see $200 additional cost as significant on a vehicle that costs $20, $30 or $40,000. By the way, do you feel that seat belt and motorcycle helmet laws are nanny state communist laws? Just curious.
As for cost-benefit analysis, if you back over someone else's toddler, and get sued for $10 million, the cost of $200 for that protection looks pretty good...
Like many other proposals, this also assumes that changing one variable won't affect other variables in the equation: that human behavior won't change after a particular law is passed or regulation enacted.
I think it will make drivers more trusting of technology instead of their own senses when they back up, and thus increase carelessness, which may increase the number of deaths and injuries the law/regulation is trying to prevent in the first place. It's sort of like motorcycle helmet laws. A state law (or absence of) that gives riders a choice as to whether to wear a helmet or not arguably makes for a safer environment for bikers, because such a policy difference from states with mandatory helmet laws changes several other variables in the equation: more people ride bikes, which makes car drivers more aware of their presence. More riders go without helmets, which makes many of them more aware of their own mortality, thus making for better riders, thus meaning fewer deaths and injuries per capita for motorcyclists, and perhaps even for car drivers as well.
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