Commentary: A Cost-Benefit Analysis of Making Safer Cars

By Cass R. Sunstein, Bloomberg View | April 10, 2014

  • April 10, 2014 at 4:32 pm
    ben kelley says:
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    When considering the “cost” side of such analyses, it’s essential to recognize that over time, costs of implementing the standard – in this case, providing back-up cameras – will fall considerably due to economies of scale in auto manufacturing, transition of the equipment from “optional” (meaning high-priced) to “standard,” and cost-reducing improvements in the technology itself. Case in point: When frontal airbags were first being considered for regulatory requirement, their estimated cost was close to $1,000 per car. Over time, the cost has plummeted to a point that it is insignificant in the overall price of a new car, even though now it covers not just frontal but a range of side impacts as well.

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