Economics and law
Source Ken Hanly
Date 04/08/10/16:00
The financial analysis that Ford conducted on the Pinto concluded that it
was not cost-efficient to add an $11 per car cost in order to correct a
flaw. Benefits derived from spending this amount of money were estimated to
be $49.5 million. This estimate assumed that each death, which could be
avoided, would be worth $200,000, that each major burn injury that could be
avoided would be worth $67,000 and that an average repair cost of $700 per
car involved in a rear end accident would be avoided. It further assumed
that there would be 2,100 burned vehicles, 180 serious burn injuries, and
180 burn deaths in making this calculation. When the unit cost was spread
out over the number of cars and light trucks which would be affected by the
design change, at a cost of $11 per vehicle, the cost was calculated to be
$137 million, much greater then the $49.5 million benefit. These figures,
which describe the fatalities and injuries, are false. All independent
experts estimate that for each person who dies by an auto fire, many more
are left with charred hands, faces and limbs. This means that Ford?s 1:1
death to injury ratio is inaccurate and the costs for Ford?s settlements
would have been much closer to the cost of implementing a solution to the
problem. However, Ford?s "cost-benefit analysis," which places a dollar
value on human life, said it wasn't profitable to make any changes to the

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