1974-02-01

Costs, Benefits, Effectiveness and Safety: Setting The Record Straight 740988

The concepts of “cost-benefit” and “cost-effectiveness” are increasingly cropping up in debate over present and future motor vehicle standards. Often they are introduced to attack, or justify, a particular standard. Just as often, they are misunderstood and misused.Since a motor vehicle safety performance standard has no costs per se, it cannot be evaluated either in cost-benefit or cost-effectiveness terms. It is the particular design alternatives available to manufacturers to achieve the objectives of a standard that have societal costs. The various design alternatives can be evaluated.Cost-effective designs should be chosen to minimize societal costs, and until there is evidence that cost-effective designs have been chosen, cost-benefit studies are premature.Even then, because of the major conceptual and methodological difficulties in the valuation of life and limb, cost-benefit studies will be appropriate only in the evaluation of designs not primarily intended to save lives and reduce injuries -- that is, vehicle designs to reduce property damage. Until manufacturers are forthcoming with accurate cost data, neither cost-effectiveness nor cost-benefit studies in this field can be relied upon. Pending legislation may resolve this.

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