Yesterday I mentioned economic analysis as it relates to intersection delay. The benefits of decreasing delay and stop-and-go movements go to the public users, and the costs of improving an intersection go to the public agency.
Today’s front page of the Bozeman Daily Chronicle features an article that means to encourage us to wear our seat belt by pointing out the costs to everyone based on an individual’s choice. It’s an effective shaping of the argument to try to persuade us to change public policy.
As I read the article, I couldn’t help categorizing according to the cost-benefit approach that I’ve been working with recently. Costs and benefits can be bared by the agency (e.g., the DOT), by the users (e.g., motorists), or by society (e.g., all Montanans). Tangible costs or benefits can be assigned a dollar figure, while intangibles can not. In this case, the intangible benefit goes to one user, the perceived improved comfort and sense of freedom to the individual not wearing a seat belt. As far as I can tell, there are no tangible benefits. Therefore, benefits = $0.
The $36 million of costs are carried by the motorists, and the society at large. The agency (DOT) carries no cost; motorists carry a portion (not defined in the article) in terms of higher auto insurance; the overall society bares the majority in terms of higher taxes and health insurance.
I’m not sure how they came to $51 per person, since Montana’s population is 974,989. Maybe they excluded children or used the number of people with Montana licenses. Nevertheless, people’s individual choices make a significant cost impact on each of us.
Benefit:cost ratio = $0/$36 million = 0.00. Since the B/C ratio is (far) less than 1, this economic analysis comes to the obvious conclusion that people should wear seat belts.
