Unsafe Cars Can Save Lives

by on May 23, 2016 at 7:15 am in Economics | Permalink

Jalopnik: If seeing that a vehicle has a zero-star safety rating isn’t enough to frighten a person out of his or her mind, seeing said vehicle in a wreck probably is. Five cars designed for India—which has minimal safety requirements for vehicles—just received that number in crash testing…

The tests come from the London-based Global New Car Assessment Program…The group tested seven cars made for the Indian market and handed five of them—the Renault Kwid, Maruti Suzuki Celerio, Maruti Suzuki Eeco, Mahindra Scorpio, and Hyundai Eon, all with no airbags—a rating of zero out of five stars for adult safety…

David Ward, secretary general of Global NCAP told the Wall Street Journal:

Global NCAP strongly believes that no manufacturer anywhere in the world should be developing new models that are so clearly sub-standard,” he said. “Car makers must ensure that their new models pass the UN’s minimum crash test regulations, and support use of an airbag.

family_on_motorcycle_indiaLet’s take a closer look. These cars are very inexpensive. A Renault Kwid, for example, can be had for under $4000. In the Indian market these cars are competing against motorcycles. Only 6 percent of Indian households own a car but 47% own a motorcycle. Overall, there are more than five times as many motorcycles as cars in India.

Motorcycles are also much more dangerous than cars.

The [U.S] federal government estimates that per mile traveled in 2013, the number of deaths on motorcycles was over 26 times the number in cars.

Similar ratios are found in the UK and Australia. I can think of several reasons why the ratio might be lower in India–lower speeds, for example, but also several reasons why the ratio might be higher (see picture above).

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.

A broader point is that in India today $250 is about 5% of GDP per capita ($5,700 at PPP) and that’s a high price to pay for the limited protection provided by an air bag. Lots of people in the United States wouldn’t pay $2750–5% of US GDP per capita–for an air bag. Why should Indians be any different? (Mannering and Whinston estimated U.S. willingness to pay was about $500 in the 1990s). As incomes in India rise more people will demand cars and they will demand better and safer cars but forcing people to buy an option before they are willing to pay for it is unlikely to make people better off.

Safety is relative so cars judged unsafe by global standards could save lives in India. The bigger lesson is that it’s always dangerous to impose global standards without taking into account the differing circumstances of time and place.

1 Michael Josem May 23, 2016 at 7:19 am

It’s surprising that you speak here about “the bigger lesson is that it’s always dangerous to impose global standards without taking into account the differing circumstances of time and place” when last week you made posts in favour of the EU. A huge problem of the EU is that they impose one-size-fits-all-regulations that stretch from (relatively) poor Romania to (relatively) rich UK, despite the obvious differences between those places.

2 Rich Berger May 23, 2016 at 7:43 am

You can say the same things about diktats from the US federal government imposed on the states. Note the threat of withholding federal educational funds from NC due to deviationism on bathrooms.

3 Anon. May 23, 2016 at 8:05 am

The variation in incomes between states is tiny compared to the variation within the EU, so it’s a far smaller issue. Mississippi has higher average income than Italy, let alone Eastern Europe.

4 Slocum May 23, 2016 at 8:24 am

Yes, but the variation in incomes between the poorest and richest counties in the U.S. remains very large ($15K per capita on the low end vs $120K on the high end — the poorest counties coming in below the national average for Mexico). So the potential damage from one-size-fits-all regulations remains. And if the federal government establishes a uniform standard (a $15/hr minimum wage being an obvious example), then states have no opportunity to allow flexibility within their own boundaries.

5 mulp May 23, 2016 at 2:17 pm

Using your logic, shouldn’t governments like India and China and Brazil, et al, subsidize oil and kerosene because paying $2 per gallon is too big a share of local income compared to the US?

Will the Congressional created commission to run Puerto Rico also cut the price of gasoline to $1 when they cut the minimum wage in half?

If not, aren’t you arguing that outsiders should dictate that prices of essentials cost more in poor countries, especially when imported.

6 Brad_sk May 23, 2016 at 3:46 pm

Why stop at county level? Even within a county, you can have rich and poor towns. So even state level mandate will not work. Heck, even a city level mandate fails because you can have sections of city that are vastly different. I guess no rules/mandates can apply. Its upto to every individual to keep track of all rules in even corner of country before considering anything for that part of area.

$15/hr is an easy case to show as a bad example for national regulation. When you go into other aspects (say, single anti-discrimination laws for entire country or single anti smoking law or single lead/mercury/etc storage or exposure laws), national level laws is absolutely necessary for a decent living condition.

7 Slocum May 23, 2016 at 6:14 pm

@mulp Price floors and ceilings are both bad ideas. And greater the difference between the artificial and market price, the more harm they cause.

@Brad_sk You’re right, we shouldn’t stop at a county level. A $15 wage would be less of a problem in the Grosse Pointes than in Detroit. But it’s true even within a city, $15/hr would cause much less disruption in Lincoln Park than on the south side of Chicago (where poverty and unemployment are already high), so I agree that a uniform minimum wage in the city of Chicago is also a bad idea (hmm — is it possible that this is an insoluble problem and minimum wages are a bad idea generally?) As for other kinds of regulations — those all have costs, too, which have differential impacts on rich and poor areas:


8 Gabe May 23, 2016 at 10:24 am


Your comment rings true to me.

Tyler is paid to promote(knowingly or not) elite memes to the educated border line libertarian. That is why the apparent contradictions you point out exist.

Thus he supports central banking, the EU, phony in-name-only “free trade” agreements and the centralization of power. Tyler is good at this.

9 Jeff R. May 23, 2016 at 10:27 am

You guys realize this blog has two different authors with rather different points of view, right?

10 prior_test2 May 23, 2016 at 11:37 am

‘with rather different points of view’

Only if one assumes that the former research director of the Independent Institute and the current general director and chairman of the Mercatus Center do not answer to the same imperatives from those funding such public püolicy institutes.

I realize that making this more concrete will only lead to a few select readers being able to see the evidence, so take it from a disloyal reader – the differences in their views simply shows that the party line allows doctrinal deviation in areas unimportant to those providing the funding. Prof. Tabarrok does not have to be a fan of strip mall dining, for example.

11 Troll me May 23, 2016 at 11:02 am

In considering the difference in average income between the USA and India, the differences between UK and Romania seem negligible. In addition to ignoring this difference, you are suggesting he takes a black and white position, whereas there is most certainly nuance in both of these implied positions, whether or not you necessarily agree with either one of them.

My understanding is that it’s easier to manipulate people with a tendency to see things in black and white. All you have to say is “hey, that’s not white. See? A little grey?”, where the black and white thinking leads to to perceive a hint of grey as obviously black because it’s certainly not white.

Grey is real.

12 PeterI May 23, 2016 at 1:37 pm

That was Tyler who wrote the posts in favour of the EU. And this post was written by…Alex… (nonetheless I doubt Tyler would support those EU regulations)

13 Ricardo May 24, 2016 at 5:46 am

At best, that’s an argument against EU expansion. Past a certain point, there is a trade-off between local regulations and expanded trade. Only the largest and most sophisticated firms could keep track of 28 sets of national regulations written in different languages as well as possibly state or province level regulations within countries that follow the federal model of government.

14 Dallas Weaver Ph.D. May 29, 2016 at 11:54 am

“Standards” of any type have issues whenever applied by force. The optimal solution to a specific problem doesn’t always conform to some universal standard.

For example, the direction that nuts go on bolts (clockwise closes or tightens) along with the thread specifications are a form of very useful standards. However, if you note the thread patterns on bicycle pedals are left/right specific and violate the standards (keep them from unscrewing if the bearings froze up).

15 Rich Berger May 23, 2016 at 7:40 am

Taking account of tradeoffs in anathema to progressives. It blows their whole racket if good intentions are not enough.

16 Troy May 23, 2016 at 8:36 am

“Let Them Eat Cake”

Plenty of safely designed BMW’s & Mercedes available on the world market — so what’s the problem?
Do-Gooders should just outlaw the manufacture and sale of “sub-standard” vehicles.

17 Troll me May 23, 2016 at 11:28 am

And that’s why we need mandatory minimum sentences, three strikes policies, and a war on drugs.

Because tradeoffs are an anathema to progressives.

18 NYT Moderate May 23, 2016 at 11:37 am

Lets not talk about three strikes policies…there is bipartisian agreement on this issue. Everyone from Jay Rockefeller on the left to Jeff Sessions on the right agrees we need to keep filing prisons as much as possible. It would be unscientific to disagree with such bi-partisian consensus. Lets talk about really important issues like LBGT bathroom policy.

19 mulp May 23, 2016 at 2:08 pm

Do you take tradeoffs into account?

If a product costs 5% of gdp more, then doesn’t income per capita increase by 5%?

Or do you believe the reason safety equipment costs more is the profit increases by 5% of gdp by slapping a “includes airbags” on a car without airbags?

The tradeoff of you making more income than when you were age 3 is a huge cost to society as your suck the lifeblood of the economy out of it with your wages and benefits, not to mention the wasted cost of teaching to read, write, etc, plus feed, cloth, house you. Better to have fed you to the pigs at age 3 to add 40 pounds of meat to the hog at slaughter.

20 Gabe May 23, 2016 at 2:15 pm

“If a product costs 5% of gdp more, then doesn’t income per capita increase by 5%?”

If this were true then the government could just mandate that air bag prices be doubled and then that would add 10% to GDP?!

The force doesn’t work like that.

21 Brad_sk May 23, 2016 at 3:49 pm

“Taking account of tradeoffs in anathema to progressives.”

Really? Is that why tea parties hate compromise and working with other side since that involves some tradeoffs?

Boy, you hypocrite tea partiers are so easy to oust.

22 Tyler Wells May 23, 2016 at 7:46 am

Here in Guatemala the culture is not to wear seatbelts and I have vever once seen a child in a car seat. So if people aren’t even using something (the seatbelt) that has proven to be very effective and is basically economically free (all cars come with seatbelts, although many subsequently remove them) then that should give you an idea as to how much people value safety. That and babies are always held by the mother, even when she also happens to be the driver.

23 Ben Ross May 23, 2016 at 8:13 am

This analysis is incorrect because it assumes traffic crashes only kill occupants of motor vehicles. In fact, the majority of traffic fatalities in India are pedestrians and bicyclists. Because cars are bigger, heavier, and less maneuverable than motorcycles, it’s highly probable that replacing motorcycles with cars increases the number of pedestrian and cyclist fatalities. No conclusion about overall safety is justified if this effect is not considered.

24 Anonymous May 23, 2016 at 8:26 am

What safety features do cars have that protect pedestrians against the cars? ABS brakes maybe? Not having airbags or a car frame that folds nicely instead of crushing the driver gives bad safety ratings in these tests but do nothing to protect the pedestrians.

25 Axa May 23, 2016 at 9:18 am

There are passive features such as energy absorbing bumpers and hoods. Plastic bumpers break in collision and leg injuries may be less severe. Steel hoods are very good to absorb shocks, but there should be 10 or more cm between the hood and hard parts (like the engine). Design purists complaint that the space between the hood and the engine make cars look like a block….1st world problems.

The passive systems may get cheap once the design and production line changes costs are absorbed, an automatic braking system ( a radar to detect obstacles and brake without driver input) may be more expensive that the entire Renault Kwid.

26 Michael Savage May 23, 2016 at 8:46 am

Totally agree. Permitting consumers to make their own choices about airbags is reasonable, because they are choosing risk for themselves, but the conclusion that it would be risk-positive overall isn’t warranted. Cars disproportionately impose risks and costs on others. Also, part of the relative riskiness of motorcycles is that they’re ridden disproportionately by young men, who are most likely to be involved in accidents however they are travelling.

27 anon May 23, 2016 at 9:35 am

I read a little while back that most moped drivers in Cambodia don’t know what a stop sign looks like.

Land of the free, eh?

28 Gabe May 23, 2016 at 10:26 am

“no conclusion is justified” so lets just be safe and mandate super expensive cars …am I right?

29 anon May 23, 2016 at 10:34 am

Let’s wish we were in India so we could have less regulation.

30 Gabe May 23, 2016 at 10:44 am

You wish whatever you want.

I wish for myself that I will not be so hubristic to think that I can come up with a “safety” regulation that inhibits individual choices for a billion people that I know little about; and to fool myself into thinking this regulation will somehow make all of those people have better lives in spite of themselves. It just seems like the type of person who thinks they are good at coming up with these rules to apply to other people could usually benefit from thinking about their own choices a bit more. I recognize this thinking error in my own life.

I am wasting my precious resource now….I’ll go try and be productive now. Enjoy your day internet!

31 anon May 23, 2016 at 12:56 pm

I was just trying for the straussian reading. If we were poorer we could have less nice things.

32 Troll me May 23, 2016 at 11:37 am

Interesting point. Also, congestion. How many lives is a billion hours lost in congestion worth?

33 Richard Fulmer May 31, 2016 at 2:55 pm

By increasing the price of cars, you increase the number of pedestrians. In general, you have a hard case to make that you make people better off by restricting their choices – replacing their judgement of what is best for them with yours.

34 rayward May 23, 2016 at 8:30 am

Of course, this is similar to the claim that airport security costs lives. No, not because people are dying while waiting in line, but because more people are traveling by auto to avoid the long lines at airport security. http://www.vox.com/2016/5/17/11687014/tsa-against-airport-security There is a difference: requiring greater safety features in autos makes autos safer, while requiring people to stand in line at airport security likely makes air travel no safer. My question: why is it that we have the technology to send people safely into outer space but we don’t have the technology to send people safely across town? The answer is that we do, it’s just that the safety of astronauts is deemed more important than the safety of people traveling across town. Why is that?

35 Slocum May 23, 2016 at 9:10 am

The per-trip safety of drivers going across town is many orders of magnitude better than that of astronauts. For the U.S. there have been two fatal crashes (each with multiple deaths) in less than 200 trips. At that ‘astronomical’ failure rate, the average auto commuter wouldn’t last a year before dying in a crash.

36 rayward May 23, 2016 at 9:20 am

So we shouldn’t devote greater resources to make travel across town safer (and more efficient) because travel in space is orders of magnitude less safe than travel by automobile.

37 Slocum May 23, 2016 at 9:36 am

Go ahead and move the goal posts, we can make that kick too. Over the last hundred plus years, we *have* devoted greater resources and travel across town *has* gotten far safer (more than 20x safer per mile now than in 1921).

38 Troll me May 23, 2016 at 11:44 am

How many dollars spent per astronaut life saved? However, as I mentioned below, there’s a lot more to the equation than the life of the astronaut.

39 ivvenalis May 23, 2016 at 9:40 am

Space travel is way less safe than driving across town.

40 Troll me May 23, 2016 at 11:41 am

Good point. But the issues of safety in space also serve for technological advancement which is likely to be of relevance in the future. I’m sure it’s nice for the astronauts to think it’s all about them, but I imagine much of it has to do with dealing with many safety and health issues by the time cheaper means of space travel is achieved.

On the matter of safety from the perspective of not crashing and safe landings, etc., there are also many spillovers relating to ballistics, satellite technologies. etc.

41 joe May 23, 2016 at 8:30 am

Modern automobiles are ridiculously over-engineered for city streets. Long before there are fully autonomous cars I’d like to see some of that technology used to govern human-controlled vehicles. Municipalities for example should be able to restrict speed and acceleration limits. Boston is considering a 20mph speed limit. It would be great if cars were physically restricted from going any faster than that.

42 David Pinto May 23, 2016 at 9:11 am


Have you ever driven in Boston? You’re lucky if you can get above 15 MPH during the day.

43 Andrew M May 23, 2016 at 9:51 am

15mph on average means half the time you’re waiting at a red light (0mph), and the other half you’re moving at 30mph. If cars were limited to a maximum of 20mph, the average speed would drop to 10mph.

44 Someone from the other site May 23, 2016 at 9:41 am

I have more than once averted a crash by flooring it instead of slamming the breaks so I am not much in support of such policies…

45 Bryan May 23, 2016 at 11:13 am

You probably decreased the odds of a collision but increased the odds of a fatality.

46 Dude May 23, 2016 at 8:33 am

I like these types of articles. Wasn’t there one just a few weeks ago about making buses less safe in order to save lives?

“of NHTSA’s research is that of the 4,323 motorcyclists killed in 2011, 33% (1426) of the riders were under the influence of alcohol.”

And if you were to look at the safety of motorcycles for males < 25, you'd see some high risk stats as well.

For an older adult, who rides sober during the day, not anywhere near 26 times more risky than cars.

47 Mike May 23, 2016 at 8:49 am

Deaths of older riders (40+) have increased considerably. Particularly in the 90s and first half of the 00s.

48 carlolspln May 23, 2016 at 8:56 am

We’ve all got to die of something 😉

49 Dude May 23, 2016 at 10:10 am

Correct, but so have their miles ridden.

50 SamChevre May 23, 2016 at 9:09 am

You’re missing something key–the basis of comparison. Young men and people who have been drinking account for a disproportionate share of deaths in cars as well.

51 David Pinto May 23, 2016 at 9:13 am

I wish we had a choice in our safety equipment. I would much rather spend $2000 on blind spot detection and automatic collision avoidance than on anti-lock brakes and airbags.

52 Alain May 23, 2016 at 10:49 am

Why do you think that you should have the discretion to allocate your funds as you see fit? Did you “make” that? It is all part of the social compact.

53 NYT libertarian May 23, 2016 at 10:57 am


Your safety ideas are unscientific. The consensus says expensive airbags are best.
Relinquish all your decisions to google maps. If google drives you into a pond then you should be sacrificed to help improve the driving software, it will save more lives int eh long run…the science says that is the best course. If you continue to fight the singularity you will need to be nudged into complying because science.

54 mulp May 23, 2016 at 1:54 pm

Collision avoidance is affordable because ten million plus anti-lock brake systems were manufactured every year – ramming into the vehicle directly in front of you is the most easily avoided collision by simply braking.

55 dearieme May 23, 2016 at 9:31 am

“the UN’s minimum crash test regulations”: is there any issue on which a suitable response to the UN is not “Piss off!”?

56 Troll me May 23, 2016 at 11:55 am

Is there any issue on which UN regulations serve as more than guidelines, which independent nations are free to apply in accordance to domestic objectives and preferences?

The option to tell the UN to piss off is actually built into the UN Charter (Article 2.1: https://en.wikipedia.org/wiki/United_Nations_Charter), with exceptions basically limited to issues of international security where the UNSC has a majority vote and there are no vetoes, AND sovereign nations pony up resources to follow through on any such intervention as authorized by the UNSC.

For some obvious areas where “piss off” is not the appropriate response, you can check activities of the WHO. In addition to ensuring access to a large amount of information, and providing structures which potentiate capacity building for health issues, it also provides an avenue through which sovereign nations may allocate resources to other sovereign nations during times of specific health crisis, on the condition that both giving and receiving sovereign nations are OK with the whole situation.

57 NYT libertarian May 23, 2016 at 12:01 pm

Thanks Troll me. The UN really is awesome. Glad they invented the concept of giving to those with bad fortune.

58 Albigensian May 23, 2016 at 10:13 am

When you speak of “motorcycles” in the context of India you’re mostly talking about 100cc models, not the heavyweights one sees in the USA. Although it’s certainly true that one sees entire families riding on them (and it’s heart-stopping to watch one go over a bump and see a kid fly up in the air, yet somehow when the kid comes down the seat is still underneath).

Perhaps a better low-cost compromise would be personal auto-rickshaw vehicles? These are not suited to high-speed roads (they don’t go fast enough) but neither are those 100cc motorcycles. An auto-rickshaw costs perhaps half as much as a small, unsafe car yet can still provide semi-enclosed transportation, perhaps at lower risk than a 100cc two-wheeler.

59 Bill May 23, 2016 at 10:47 am

Eh, what’s a foreign life worth anyway.

They can have more deaths,

As long as they take our pollution.

60 Yancey Ward May 23, 2016 at 11:01 am

Clearly, the right response, Alex, is to ban the motorcycles.

61 NYT libertarian May 23, 2016 at 11:14 am

Yancey good idea, but lets get to the root of the problem. Many of these subhumans are trying to get to jobs or to secure supplies for survival(like chickpeas or goats milk)….if we just ban jobs and chickpeas think how many fewer people would die on the streets of India? I just ran a monte carlo simulation of this scenario and it says that transportation deaths of all types would drop drammatically! It is so sad though, the ignorant masses seem to hate science and will never fully accept these truths.

62 Thomas May 23, 2016 at 1:37 pm

The Monte Carlo simulation was a good touch.

63 Moreno Klaus May 23, 2016 at 11:02 am

Interestingly noone here considered how do these cars compare in price/safety to 2nd or 3nd hand cars of A-car brands, which maybe would be the more correct comparison? Also who knows if these cars are much better than motorcycles in respect to overall safety? There are many factors to be considered as mentioned in other posts.

64 NYT libertarian May 23, 2016 at 11:09 am

Good points Moreno, We have many computer simulations to run before we decide how many modes of transportation to ban for those ignorant billions on the other side of the planet. Luckily those people have us and our science looking out for their safety. If those indians busily trying to make it to their jobs knew how much we cared for them surely they would have lots of gratitude and prayers to offer up to us and our rule-making expertise.

65 Troll me May 23, 2016 at 12:09 pm

Notwithstanding the numerous limitations of the analysis, probably this guy actually cares more about the related Indian deaths than quite a lot of politicians (most?) over there.

Especially at the local level where a lot of enforcement would take place, my understanding is that protection of diverse types of local mafias is a major part of the story, and handouts are basically designed to pass the threshold to get elected. Never mind that probably the best thing that could be done for the poor in India would be to take on those mafias, thus lowering costs and improving the quality of public infrastructure and services.

66 Moreno Klaus May 24, 2016 at 8:43 am

Not that the different from US and Europe… Republicans and Democrats are also a maffia, just legal. (Same for EU)

67 Uninformed Observer May 23, 2016 at 12:29 pm

Is there a Laffer Curve for safety regulations?

68 Thomas May 23, 2016 at 1:40 pm

Yes. The nature of the world is ‘limited resources and diminishing returns’. Everything has a Laffer curve.

69 mulp May 23, 2016 at 1:41 pm

“The [U.S] federal government estimates that per mile traveled in 2013, the number of deaths on motorcycles was over 26 times the number in cars.”

This is the result of government over regulation that prohibits carrying 2 or more passengers on motorcycles, instead forcing most motorcycle owners to ride solo which promotes risk taking.

A better rule for motorcycle safety would require the driver carry at least two of the driver’s children at all times to promote safe, defensive driving to ensure his bloodline is maintained.

70 mulp May 23, 2016 at 1:49 pm

“Lots of people in the United States wouldn’t pay $2750–5% of US GDP per capita–for an air bag.”

I find one armed economists to be so interesting.

Alex agrees with “lots of people in the US” that earning $2750 more per person is a bad thing because income and gdp growth are bad for both individuals and a nation’s economy!

Yet, Alex spends lots of time with other like minded economists talking about how the economy and the incomes of workers is not increasing!

71 The Engineer May 23, 2016 at 2:17 pm

Make work fallacy. Dude, that’s like Econ 101.

72 Doug May 23, 2016 at 6:03 pm

Alex–fellow Canuck economist here. Nice safety analysis. Agree with you.
I read the comments and I sometimes wonder why you bother.

Only answer is that these comments are a non-random sample of the overall pop that learns something here.


73 Prakash May 24, 2016 at 7:03 am

Alex’s analysis is correct. Other indian transport options are what these cars have to be compared to. From personal experience, I’ve driven a car without airbags for 5 years now and only now am looking to get one with airbags and ABS. Traffic speeds rarely justify the extra safety.

Another aspect is taxation. Indian taxes on cars are pretty high. But knowing the indian consumer, any reduction in taxes would mostly be passed on as a price cut, rather than using that money for better steel or more safety features.

Overall, having transportation is important and cheap cars are better than no cars.

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