Implicit user costs

Implicit User Costs—Another Human Factor... 

Implicit costs are recognized by motorists. Recall that motorists cite discomfort and inconvenience as a major deterrent to safety belt use. My own research indicates that discomfort costs are more than 7 times as large as time costs for manual lap belts. Individuals are considering implicit user costs in their own private assessment. 

The mistake of omitting implicit user costs is not new nor is it peculiar to the passive restraint issue. The Highway Safety Needs Report ranks various highway safety countermeasures by cost-effectiveness and finds ... 

Indirectly, implicit user costs do bear on the decisions at NHTSA, but with quite different results. If public resistance to the restraint standard increases with implicit user costs then each of the last three major decisions by NHTSA reflect cognizance of implidt costs. Secretary of Transportation Coleman devised a demonstration program to test and enhance consumer acceptance. Secretary Adams dismissed the Coleman Rule and required passive restraints on the basis that public acceptance does not matter, and Secretary Lewis rescinded the requirement citing potential adverse consumer reaction. Viewed in this light all three secretaries had to deal with implicit costs. Ultimately administrative judgment will be required on passive restraints but explicit incorporation of user costs into benefit-cost analysis is conceptually appropriate. In one sense it is as a measure of public resistance. 

Are Nonpecuniary, Nongovernmental Costs Considered A common imperfection in regulatory decisions is the failure to include all real, sodal economic costs in benefit-cost analysis and in studies of motorist behavior. There is a penchant for disutility costs would accompany passive seat belts for some motorists. To these costs time and incx)nvenience costs would be added in analysis of a policy which requires use of manual seat belts. Inclusion of nonpecuniary costs in analysis of passive seat belts would explain why some... 

The estimate is based on my study, Glenn Blomquist Value of Life Saving Implications of Consumption Activity. Journal of Political Economy 87 (June IW) 540-558. Clifford Winston also finds substantial implicit user cost for seat belt use using a different estimation technique and different data. See Clifford Winston and Associates Blind Intersection Policy and the Automobile Industry (Washington, D.C. The Brookings Institution, 1987.) Chapter 5. For further discussion of implicit user costs see Glenn Blomquist and Sam Peltzman. Passive Restraints An Economist s View, in Robert W. 

For a benefit cost anal is of passive restraints which does consider changes in accident chances and implicit user costs see Blomquist and Peltzman (1981). Our study also was available when the Adams Rule was being reconsidered. 

Implicit in the discussion immediately above is the assumption that the firm is forever locked into a particular production process and output bundle. However, the air pollution increase may differentially affect the production and the user costs of alternative processes and bundles. The firm will substitute toward the least costly alternative. Brick rather than painted wood may now, for example, enclose the firm s offices. A complete assessment of the quasi-rent consequences of the air pollution increase for the firm requires that these induced technical changes as well as production and user cost changes be taken into account. As Figure 2 demonstrates, these changes for the firm will also have consumer surplus consequences. 

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