For long, the primary focus of our automobile industry has been to keep costs low so that the vehicles are affordably priced. This has meant that safety hasn’t received as much attention as it deserves. The base models of entry-level cars are often sold with bare-minimum safety equipment, and airbags are typically an add-on that one pays for, despite evidence that these can act as life-savers in the event of a crash. A human aversion to contemplating potentially-fatal outcomes, though, tends to warp people’s price-benefit calculations of such features. The state has good reason to intervene in markets where private choices are not always rational, and this is an example.

Source: Mint March 07, 2021 16:52 UTC