Nordhaus Revision of NHTSAs Analysis

In his testimony on the rescission of the Adams Rule William Nordhaus gave a critique of NHTSA s benefit-cost analysis and offered an alternative study. His critique covers munerous topics including the estimated cost of passive belts and the value of risk reductions employed. The central issue, however is the projected increase in usage which would accompany passive safety belts. 

Nordhaus also analyzes the benefits of alternatives to the Adams Rule which calls for large car first phase-in of passive restraints. These alternatives are simultaneous installation of passive restraints in cars of all sizes, reversal of the phase in so that small cars have passive restraints first, and rescission. Of these the small-car-first alternative has slightly larger net benefits than the Adams Rule, or simultaneous installation and much larger net benefits than rescission. 

The major features of the four benefit-cost analyses discussed are summarized in Table 4-1. While differences exist, they share a common result. We might offer a conclusion based on these conventional benefit cost studies that the mandatory passive restraints poli 7 as described in the Adams Rule passes the social net benefit test. 

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