Turns out it’s (1997) US$1.54 million.

The reference is in the blog post.

The study (IIRC it was a scientific study done somewhere) wasn’t designed to show that we’re bad at maths, but our gut feel is actually very good at solving problems with tons of variables, which is very difficult with “real maths”. — you can keep about 3 numbers in your “head”, but have a feel for many many numbers in your “gut”.

If you used the analysis of the air bag in your purchasing decision, you may optimise on that value rather than something else which may have a far greater impact on how safe the car is (like perhaps colour).

I don’t think you should discounting the replacement cost of airbags which fire accidentally or in non-life-vs-death situations as trivial - according to research, the 2001 cost of replacing a single airbag was NZ$1320, so if my car had 4 such airbags (driver+passenger, front+side), one good 16km/h jolt would effectively write off the vehicle (NZ$5280).

However, the same research shows both that there is subtantial benefit in the non life-vs-death case, and that you are also seriously undervaluing the dollar worth of the human life (unless your personal net assets are rather more substantial than they look). The paper puts a single life (death) at AZ$2.47 million dollars, based on “willingness to pay” settlement figures in legal claims.

The summary of the paper is (roughly) that it’s economically viable to retro-fit or replace airbags on vehicles in NZ up to 14 years old, but that it’s also far more cost effective if they come as standard on a new car….

Can you recommend any further reading there? I don’t doubt that humans are crap at rational decisions, but I would be interested in hearing how they’ve shown that attempts at carefully-considered “rational” decision-making turns out to be less effective than “gut feel”.

Thanks

That’s a funny anecdote, but it didn’t affect my decision for two reasons.

One is that hypothesis that car colour affects accident rates has had little scientific support.

The other is that I was choosing between several models of car rather than several instances of cars. The colour choices between the car models were effectively identical.

I am one of those people who gets angsty about such a big purchase, and I come over all analytical to overcome my fear.

Research shows that humans suck at making big decisions rationally. Best to obsess over the small stuff and listen to your gut on the big stuff; that gives you the biggest chances of making the right moves.

I have to say Scott Adams’ approach to the problem seems intelligent, though.

He came home with a dark green Saab 99. On his way home from the car-dealer, waiting for green light at an intersection, a guy on a moped crashed into his passenger-door. Ferenc kept the car for 3 years in wich time it never experienced any 6 months period without an accident.

In 1981 he started working as a car mechanic at the local BMW-store and felt obliged to by one of their models. He was glowing with pride, cruisig along on his way home with his brand new, dark-blue Beemer. Until a taxi tried to overtake another car in the opposite lane. Do I need to say anything else than HEAD ON…? Luckily they all climed out of the wrecks with minimal injuries and Ferenc could go buy himself a new car.

Ferenc still works at BMW and is a proud owner of his third YELLOW 5-series. None of these 3 cars have ever been hit by so much as a fly…

Safe driving