On Thu, Jan 28, 2010 at 3:20 PM, Max Sawicky <[email protected]> wrote:
> I seem to be talking to myself on this issue, but here is a relevant
> quote from something I'm reading now:
>
> " . . . [M]ost transportation policies are based on implicit
> assumptions about the degree to which various categories of users are
> paying their way (i.e., trucks vs. rail -- mbs).  The relevant choice
> is thus not whether to estimate if users are paying their way but
> whether the estimates that guide policy will be implicit, based
> largely on intuition and hunches, or explicit and thus subject to
> review, refinement, and debate."



It may help to work with a concrete example. David seems to imply that
Ford's decision on the Pinto was based on a sound c/b analysis and
their action was reasonable. I disagree and do the majority of PEN-L
with the notable dissents of Julio and Bill.

For the moment I want to play along with David's assumption that there
is always a reasonable way to quantify cost and benefit.

Now why do I believe Ford's Pinto analysis was wrong? After all they
did set a fairly generous estimate of $200,000 for the value of a
human life. If you think this estimate is too small, what should be
the value? Infinite? But no car or any other product can guarantee
infinite safety. Surely it is reasonable to accept some small enough
but non-zero safety risk. In order to determine how small should this
risk be, it is necessary to implicitly or explicitly specify some
non-infinite value for human safety. Even if we decline to quantify it
explicitly, we would merely making choices that implicitly does this
anyway.

I think the right answer in this case is that Ford's value estimate
was simply because it leads to an absurd conclusion. If a Pinto buyer
was told that they could have (a) a car that might explode in the
event of a serious collision (which is rare, but happens) or (b) for
$11 more, a car that won't explode, I don't think any reasonable
person would choose (a). Clearly they implicitly value their lives
more than Ford valued their lives. What makes this egregious, of
course, is that Ford in effect made this choice for its customers
without ever asking them..
-raghu.


-- 
I like to leave messages *before* the beep.
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