Air bags add approximately $600 to the cost of the average car compared to a set

Question

Air bags add approximately $600 to the cost of the average car compared to a set of seat belts which cost approximately $100. Air bag opponents argue that these 'electronic' devices can fail causing injury or death. Therefore opponents believe that the role of government should be limited to providing information on the risks of having versus not having airbags.Analyze and discuss the positive and the normative economic arguments that have been used with this issue. How do these arguments relate to the lives that may or may not be put into harm's way?

Explanation / Answer

Positive argument: Cost of car increases drastically, which does not seem to be an economically efficient outcome.

Looking at the cost side, an air bag adds approximately $600 to the cost of the average car compared to a set of seat belts which cost approximately $100. This makes it efficient to prefer seat belts over airbags.

Normative argument: These 'electronic' devices can fail causing injury or death. This means it is not completely safe to get airbags in cars. These devices can also fail at times, causing injury to the passengers.

Looking at these views, one can say that airbags not only increase cost of car, but also do not guarantee 100% safety. This makes it economically efficient to not rely on airbags blindly. Cheaper alternatives can also be looked at.

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