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Delaying the Rearview Camera Rule is Good for the Poor

by James Broughel on July 9, 2013

in Regulation, Transit and Transportation

A few weeks ago, the Department of Transportation (DOT) announced it would delay implementation of a regulation requiring that rearview cameras be installed in new automobiles. The rule was designed to prevent backover accidents by increasing drivers’ fields of vision to include the area behind and underneath vehicles. The DOT said more research was needed before finalizing the regulation, but there is another, perhaps more important reason for delaying the rule. The costs of this rule, and many others like it, weigh most heavily on those with low incomes, while the benefits cater to the preferences of those who are better-off financially.

The rearview camera regulation was expected to increase the cost of an automobile by approximately $200. This may not seem like much money, but it means a person buying a new car will have less money on hand to spend on other items that improve quality of life. These items might include things like healthcare or healthier food. Those who already have access to quality healthcare services, or who shop regularly at high end supermarkets like Whole Foods, may prefer to have the risk of a backup accident reduced over the additional $200 spent on a new car. Alternatively, those who don’t have easy access to healthcare or healthy food, may well prefer the $200.

A lot of regulation is really about reducing risks. Some risks pose large dangers, like the risk of radiation exposure (or death) if you are within range of a nuclear blast. Some risks pose small dangers, like a mosquito bite. Some risks are very likely, like the risk of stubbing your toe at some point in your lifetime, while other risks are very remote, like the chance that the Earth will be hit by a gigantic asteroid next week.

Risks are everywhere and can never be eliminated entirely from life. If we tried to eliminate every risk we face, we’d all live like John Travolta in the movie The Boy in the Plastic Bubble (and of course, he could also be hit by an asteroid!). The question we need to ask ourselves is: how do we manage risks in a way that makes the most sense given limited resources in society? In addition to this important question, we may also want to ask ourselves to what degree distributional effects are important as we consider which risks to mitigate?

There are two main ways that society can manage risks. First, we can manage risks we face privately, say by choosing to eat vegetables often or to go to the gym. In this way, a person can reduce the risk of cardiovascular disease, a leading cause of death in the United States, as well as other health problems. We can also choose to manage risks publicly, say through regulation or other government action. For example, the government passes laws requiring everyone to get vaccinated against certain illnesses, and this reduces the risk of getting sick from those around us.

Not surprisingly, low income families spend less on private risk mitigation than high income families do. Similarly, those who live in lower income areas tend to face higher mortality risks from a whole host of factors (e.g. accidents, homicide, cancer), when compared to those who live in wealthier neighborhoods. People with higher incomes tend to demand more risk reduction, just as they demand more of other goods or services. Therefore, spending money to reduce very low probability risks, like the risk of being backed over by a car in reverse, is more in line with preferences of the wealthy, since the wealthy will demand more risk reduction of this sort than the poor will.

Such a rule may also result in unintended consequences.  Just as using seat belts has been shown to lead to people driving faster, relying on a rearview camera when driving in reverse may lead to people being less careful about backing up.  For example, someone could be running outside of the camera’s view, and only come into view just as he or she is hit by the car.  Relying on cameras entirely may increase the risk of some people getting hit.

When the government intervenes and reduces risks for us, it is making a choice for us about which risks are most important, and forcing everyone in society to pay to address these risks. But not all risks are the same. In the case of the rearview camera rule, everyone must pay the extra money for the new device in the car (unless they forgo buying a new car which also carries risks), yet the risk of accident in a backup crash is small relative to other risks. Simply moving out of a low income neighborhood can reduce a whole host of risks that low income families face. By forcing the poor to pay to reduce the likelihood of tiny probability events, DOT is essentially saying poor people shouldn’t have the option of reducing larger risks they face. Instead, the poor should share the burden of reducing risks that are more in line with the preferences of the wealthy, who have likely already paid to reduce the types of risks that low income families still face.

Politicians and regulators like to claim that they are saving lives with regulation and just leave it at that. But the reality is often much more complicated with unintended consequences and regressive effects. Regulations have costs and those costs often fall disproportionately on those with the least ability to pay. Regulations also involve tradeoffs that leave some groups better off, while making other groups worse off. When one of the groups made worse off is the poor, we should think very carefully before proceeding with a policy, no matter how well intentioned policymakers may be.

The DOT is delaying the rearview camera rule so it can conduct more research on the issue. This is a sensible decision. Everyone wants to reduce the prevalence of backover accidents, but we should be looking for ways to achieve this goal that don’t disadvantage the least well off in society.

  • DavidNJ

    You are leaving out the 14,000 backover injuries per year. When you add the direct costs (medical care, long term care) and indirect costs (lost wage from time out of work, family stress, lost quality of life) I believe you will find this feature is close to a draw at $200/car.

    However, it is no longer $200/car. From 2008 when that number appeared and 2014, most cars now have an LCD display standard. Even inexpensive models. As a result, the industry cost is probably under $100/car and may be closer to $50/car.

    Net: this legislation is long over due.

    • James

      Thanks for your response David. It may very well be that the
      regulation passes a benefit-cost test, meaning the rule produces more benefits than costs. However, that does not mean the rule passes a benefit-cost test for every demographic (i.e. the poor). A low income person would probably rather have that extra $50 or $200 to manage other risks in life, rather than have to spend the money on a luxury item in a vehicle. And since the market already appears to be responding to the problem by providing these cameras on more and more vehicles, and providing them more cheaply over time, that’s all the more reason to let the market continue solving the problem. Why impose unnecessary burdens on low income individuals when the problem is already going away on its own?

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