Friday, March 9, 2012

Here's a project for you economics students

In an editorial Wednesday the Apple Dumpling Gang waxed poetic regarding the benefits of rear-view cameras on vehicles....

Rear-view cameras save money and lives, The Apple Dumpling Gang, ChronBlog
Our latest favorite feature? Rear-view cameras. These handy devices are proving so effective that the National Highway Traffic Safety Administration is considering a rule that would require the cameras in new cars.

Every year, about 228 people die and about 17,000 are injured in back-over accidents, and 44 percent of those deaths are children under 5. We like the idea that something as straightforward as car cameras can save lives. Of course, they're not free.


In keeping with the Gang's M.O. they offer up this nugget a little later:
The price is high because it would affect so many future cars. The cost per car doesn't sound as startling, adding an additional $58 to $203 per vehicle, depending on whether it already has some sort of screen. And as the technology advances, that cost should drop.

What the Gang doesn't say is that this is the latest of many "features" that they've advocated for vehicles that will just add a "small cost" to each individual car. I wouldn't be surprised if, since the current make-up of the Gang was established, they've advocated for features that would make up an increase in car prices in the 4-5 thousand range.

So, here's the assignment for some aspiring economist who wants to see the effect of Place Called Perfect economics. Round up all of the Apple Dumpling Gang's "things we'd like to see mandated for every car" and then add up the estimated increase in the price per vehicle.

When you're finished with that, take an entry-level car (say the Chevy Sonic) and see what the price would be with all of the Gang's doo-dads added on.

Then ask yourself: Would these "additions" price a large part of the population out of the car market?

And who would find this most desirable?

You can thank me for the A you'll receive later.

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