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From: dr_who@umcp-cs.UUCP
Newsgroups: net.auto
Subject: airbags--a cost-benefit approach
Message-ID: <936@umcp-cs.UUCP>
Date: Mon, 18-Jul-83 08:33:17 EDT
Article-I.D.: umcp-cs.936
Posted: Mon Jul 18 08:33:17 1983
Date-Received: Mon, 18-Jul-83 19:31:03 EDT
Organization: Univ. of Maryland, Computer Science Dept.
Lines: 28

According to an article in Reader's Digest (March 1980), General Motors
estimated its costs at $509 to 581 1980-dollars per air-bag-equipped car.
Ford said its costs could reach $828 by 1982.  Repair bills for replacing a
deployed bag would be up to 2.5 times the cost of original installment.  In
light of these facts, let me use $900 per car as my estimate of costs for
air bag requirements (in 1983 dollars).

The same article reports a 1977 NHTSA estimate of 9000 lives saved per year
for air bags and automatic seat belts combined.  However, the GAO criticized
that estimate (apparently the figures were derived from laboratory test that
were simplistic versions of actual accidents).  I use 5000 as an estimate,
since I don't think most people will wear lap belts, even "automatic" belts.
A study of VW rabbit owners who VOLUNTARILY CHOSE and PAID EXTRA for
automatic seat belts showed that 45% of them disengaged the seat belts after
starting the engine or had the system changed to remove the "automatic"
feature.  

110,000,000 cars * $900 per car / 11 years avg. life = $9 billion per yr
(correct my figures if unrealistic) is the cost.
$9 billion divided by 5000 lives = $1.8 million per life, a figure in the
reasonable range (i.e., the arguable range) but in my opinion a little on
the high side.  Add to this the fact that people would be coerced to buy air
bags, and the consideration that alternative policies (e.g., encourage
insurance companies to pay less to people injured while not wearing seat
belts) might be more cost-effective.  

-- Paul Torek, U of MD College Park