I don’t buy cars on impulse. I am one of those people who gets angsty about such a big purchase, and I come over all analytical to overcome my fear.<\/p>\n
How can I rationally choose between different cars? Well, I list all the different features, come to a personal judgement about what they are worth to me, rate all the cars being evaluated, and decide which one gives the best value for money.<\/p>\n
Some items are moderately easy: I can judge how much more I will pay for a car with a built-in CD player by looking at the price of an aftermarket CD player, plus the installation cost.<\/p>\n
Some items are pretty subjective: How much happier (or sadder) would I be with 10 more kilowatts of engine power, measured in dollars.<\/p>\n
Some take a bit of calculation: Every time I drive during fog, I would pay $1 to have fog-lights turned on. Now, how often will I drive during fog during the life of this car?<\/p>\n
During such a purchasing process, I stumbled over one item that posed a tricky dilemma: How much more would I be willing to pay for an equivalent car with a passenger-side airbag?<\/p>\n
How could I possibly put a dollar value on human life? Let me show you!<\/p>\n
First, I estimated the probability that the car would be involved in a horrific accident that – but for the passenger airbag – would have killed the passenger.<\/p>\n
That was a tough calculation. I had to take into account the expected time that I would own the car, the probability that I would be involved in a serious accident each year (given my normal driving style and risk-profile), the percentage of those accidents that would be on the borderline where an air-bag would mean the difference between life and death for the passenger, and the percentage of time that I was involved in such an accident that I would actually have a passenger in the front seat.<\/p>\n
Then I came to the hard part: how much was it worth to me for my passenger (probably a family member or friend) to not<\/em> be (certainly) killed by my driving? Tough question. A lot, clearly! In fact, all of it! All of my money to save that life! There’s the solution! I substituted in my net worth for the value of a human life.<\/p>\n So multiplying the probability of a passenger air-bag saving a life by my net worth that I would sacrifice to prevent a (certain) death, gave me the expected value of a passenger air-bag.<\/p>\n I ignored the expected residual value (i.e. that the unused airbag would increase the re-sale value of the car when I sold) and the expected cost of replacing airbags that fired in non-life-versus-death situations – they are both trivial and probably pretty much cancel out.<\/p>\n What was the result? What was a passenger air-bag worth to me?<\/p>\n Fifty measly cents!<\/p>\n I felt a little ungenerous, but I couldn’t argue with my logic. Can you?<\/p>\n p.s. For the record, yes, my current car has a passenger airbag.<\/p>\n","protected":false},"excerpt":{"rendered":" How could I possibly put a dollar value on human life? <\/p>\n Let me show you!<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":"","footnotes":""},"categories":[23,31,27],"tags":[70],"class_list":["post-339","post","type-post","status-publish","format-standard","hentry","category-based-on-a-true-story","category-geek","category-thoughts-from-the-shower","tag-mathematics"],"_links":{"self":[{"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/posts\/339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/comments?post=339"}],"version-history":[{"count":0,"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/posts\/339\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/media?parent=339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/categories?post=339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.somethinkodd.com\/oddthinking\/wp-json\/wp\/v2\/tags?post=339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}