Cost Benefit Analysis for Measuring Safety Measures
Cost-Benefit Analysis is a method of estimating monetary values of Benefits and Costs associated with a project and then reaching a conclusion whether each aspect of a project is desirable up to a certain level or not. The main problem with this approach is that some of the benefits can be expressed in a measurable unit like money while other cannot be expressed in a similar way. Consider a project where workload is exceeding the limitation of resources, should you consider adding a new team member? The answer can be quantified in terms of costs and benefits where benefits can be expressed in terms of money value and decision can be made accurately. In contrast, the decision where safety measures benefit in saving human lives are very hard to analyze using cost benefit analysis. Saving human lives cannot be easily or clearly expressed in terms of money. This is where the debate start about ethical issues of cost benefit analysis especially for safety measures to save human lives.
In Ford Pinto case, it is factually established that the car had a faulty fuel system design that endangers the lives of passengers in case of an accident. The defective fuel system design resulted in explosions and this led to debate on the decision not to upgrade the fuel system design based on Cost Benefit Analysis.
Ford has already created the new design, but then used the Cost Benefit Analysis to reach the conclusion that cost of upgrading the design exceeds the benefits. Ford used the risk-benefit analysis and figured out that redesigning the fuel system has a greater cost compared to its societal benefits. The numbers revealed that is would cost Ford Motor Company something around $137 million for upgrading the fuel system design while the benefit is estimated at $49.5 million. The benefit includes the expected price to be paid for car damages, injuries and deaths resulting from fuel tank explosion. Hence Ford had a justification for not upgrading the design.
Cost benefit analysis would not be able to satisfy people when it comes to saving human lives. Ideally, while travelling in air, passengers should have the military standard ejection seat to save their lives in case of plane going down, but economically and commercially this can never be viable. Similarly in road safety, if Ford decided against the upgrade due to economic reasons, they were legally on the right side but ethically it will always be debatable.
Christopher Leggett. The Ford Pinto Case: The Valuation Of Life As It Applies To The Negligence-Efficiency Argument, 1999. Web. 19 June 2015.
