When Are Safer Cars a Bad Idea?

business_ethics_highlights_2Should a car company feel bad about producing a car with the worst possible crash-test rating? The blog entry below argues that they should not. The discussion is focused on India, where for many people the choice is between a not-very-safe car and an even less safe motorcycle. Insisting on more safety (at a higher price) means that people will keep riding motorcycles, and keep dying. >>>

LINK: Unsafe Cars Can Save Lives (by Alex Tabarrok for Marginal Revolution)

…The GNCAP worries that some Indian cars don’t have airbags but forgets that no Indian motorcycles have airbags. Even a zero-star car is much safer than a motorcycle. Air bags cost about $200-$400 (somewhat older estimates here a, b, c) and are not terribly effective. (Levitt and Porter, for example, calculated that air bags saved 550 lives in 1997 compared to 15,000 lives saved by seatbelts.) At $250, airbags would increase the cost of a $5,000 car by 5%. A higher price for automobiles would reduce the number of relatively safe automobiles and increase the number of relatively dangerous motorcycles and thus an air bag requirement could result in more traffic fatalities….

What do you think?

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