Motor Vehicle Safety Standard, Rearview Mirrors et al.

Fewer injuries and fatalities to pedestrians and other non-occupants stemming from backing up of vehicles. The analysis clearly identifies potential outcomes that affect citizens' quality of life. Young children and senior citizens are believed to be especially vulnerable to backover accidents. The RIA also mentions nonquantified benefits of convenience, facilitation of introduction of other safety features, and emotional well-being of victims, families, and drivers.

Injuries and fatalities are both measured directly. Reduced property damage is incorporated into a net calculation that also includes maintenance costs; the result may be a cost or a benefit. These are all monetized.

The theory is presented that rear visibility technology will reduce backover accidents as long as (1) a crash is “avoidable” through use of the device, (2) the pedestrian is within the system's range, and (3) there is sufficient “driver response” whereby the driver receives this information and responds appropriately. Final effectiveness of technology is a product of all three factors and thus provides a coherent and testable theory of how effective technology is, based on projections of fewer injuries and fatalities stemming from backover accidents. There is no discussion of whether driver behavior might change because drivers believe the vehicles with new technology are safer.

NHTSA estimates 292 fatalities and 18,000 injuries annually from backover accidents involving all vehicles. Projections of reductions in injuries and fatalities from adoption of rear-visibility technology suggest empirical support for the theory. However, NHTSA admits its conclusions are tentative for reasons that include limited understanding of and problems in isolating the relative contributions (to backover crashes) of attributes of vehicles, vehicle exposures to pedestrians, and driver situational awareness while driving backward. Tentative conclusions would suggest tentative empirical support that is less than credible empirical support.

Simulation studies based on available evidence are presented that provide estimates of lives saved and injuries avoided by various enhanced technologies. NHTSA admits that many experiments are very small in nature (e.g., 25 drivers), and it is especially difficult to estimate likely driver reaction to new technology given that so few drivers have ever been exposed to it. A sensitivity analysis uses a range of values for a statistical life. A Monte Carlo analysis assesses the effects of numerous uncertainties that affect benefits. Assumptions that affect the probability distributions are asserted but not always supported with evidence.

There is no identification of a market failure or other systemic problem associated with injuries or fatalities connected to backover accidents. It is unclear if NHTSA believes that consumers of vehicles are misinformed about safety, whether there exists some negative externality in the vehicle market, whether suppliers lack incentives or ability to provide vehicles with higher safety characteristics, or if auto-insurance companies somehow fail to adequately address associated injury/fatality potential when setting insurance premiums. NHTSA merely argues that, while parking-assistance systems currently exist, few aid in the mitigation of backover incidents. NHTSA itself admits that enhanced technology is not cost-effective, thus indirectly acknowledging it overstates the systemic nature of the problem.

The implied problem is simply that current use of technology in vehicles causes too many injuries/fatalities from backover accidents. Requiring enhanced technology in vehicles will, in theory, systematically reduce injuries/fatalities. However, it is unclear why consumers, parents with small children, auto-insurance firms, auto manufacturers and other interested parties somehow fail to understand the depth of the problem as implicitly argued by NHTSA.

NHTSA does not attempt to present credible evidence supporting the theory that there is a market failure or other systemic problem. While hypothesizing that enhanced technology will reduce injuries/fatalities stemming from backover accidents, NHTSA does not attempt to somehow couple these reductions with numbers that follow from a market-failure analysis.

There is some acknowledgement of uncertainties about the problem. NHTSA states that drivers tend to reverse their vehicles when parking or exiting a parking space. Thus, a number of these cases occur off the traffic way and outside the realm of data typically collected by NHTSA. Also, NHTSA readily admits very few studies exist about effectiveness of newer technology since no country has so far adopted technologies comparable to those being considered in their analysis. NHTSA admits that it could not determine whether there were any backover incidents involving low-speed vehicles, small school buses, and school vans, but apparently lack of information did not alter its analysis.

The proposed rule is a "performance" requirement, allowing any technology that will provide the driver with an image of what's behind the vehicle. The analysis considers various technologies that would likely be used in the near term to meet different performance standards. Analysis considers mirrors, sensors, and cameras. It also breaks out separately the cost-effectiveness of applying the regulation to all vehicles or to passenger cars and light trucks separately, and it considers requiring different technologies for cars and for trucks. Some other alternatives considered in the ANPRM are mentioned in the NPRM.

These are interesting variations on the same basic regulatory approach: mandated visibility standards. RIA notes that 76 percent of pedestrians involved in backup accidents were moving. NPRM asserts that because most victims are young children, they cannot be expected to respond to warning signals or other safety measures. Raising penalties for drivers or auto manufacturers for causing backover accidents or suggesting insurance companies somehow address the problem through better insurance rating of drivers or specific vehicles are never considered. While disseminating information to drivers either through public announcements or driver training/testing was mentioned, it is not considered a viable alternative.

Mirrors are dismissed because no drivers in experiments looked at mirrors, but DOT indicates willingness to reconsider this in response to evidence. Equivalent lives saved are calculated separately for sensors, cameras, and cars/trucks. Avoided property damage is implicitly included in cost calculation. Longer adoption periods and setting differential regulations on different types of vehicles are discussed but not fully analyzed. For example, NHTSA considered having different visibility requirements for certain vehicle types, but was not further developed in the analysis.

Baseline is the percentage of vehicles with cameras or sensors projected by manufacturers for 2010 in confidential surveys. There appears to be no attempt to extrapolate beyond this to estimate how the market would evolve in the absence of the regulation. The analysis does not consider whether other marketplace developments or even better driver response might itself increase over time without new government regulation. NHTSA, however, readily admits that new technology is emerging rapidly and thus understands that the auto industry is likely to adopt newer technology with or without new regulation.

Installation, maintenance, and repair costs are considered for ultrasonic and camera systems. Costs not considered as extensively for mirrors because RIA claims mirrors would prevent no accidents. When installed in a vehicle without any existing adequate display screen, rearview camera systems are estimated to cost consumers between $159 and $203 per vehicle. For a vehicle that already has an adequate display, such as one found in navigation units, their incremental cost is estimated at $58. The total incremental cost to equip a 16.6-million vehicle fleet with camera systems is estimated to be $1.9 to $2.7 billion. NHTSA also estimates that rear-object sensor systems cost between $52 and $92 per vehicle. The total incremental cost to equip a 16.6-million vehicle fleet with sensor systems is estimated to be between $0.3 to $1.2 billion. Several different types of mirrors were also identified such as interior look-down mirrors mounted on vans and SUVs, but not cars, and are estimated to cost $40 per vehicle.

NHTSA estimates the net property damage effects to consumers from using a camera or sensor system to avoid backing into fixed objects, along with additional costs when a vehicle is struck in the rear and the camera or sensor is destroyed. Maintenance costs are also addressed. There is no discussion of how insurance rates might change. NHTSA assumes spending on new vehicles is unlikely to be affected much since all manufacturers must adopt the proposed standard.

Analysis reports the cost per vehicle of the mandated technologies. There is minimal discussion that prices of automobiles will rise. It is also assumed that since every manufacturer needs to meet the standard, the proposal would have no effect on competition even though NHTSA admits that it does raise overall cost and thus could affect sales in a small way. NHTSA thus appears to believe that higher costs will be shifted onto consumers, though this is not directly stated. Repair and maintenance costs stemming from property damage are estimated, along with net present value of lifetime property damage costs.

There is no mention that auto-insurance rates might decline if new regulation reduces injuries and fatalities stemming from backover accidents. Possible increases in insurance rates to cover higher costs of proposed regulation (higher auto prices) are not considered either. NHTSA believes the rulemaking would not have a significant economic impact on small-vehicle manufacturers because the systems are not technically hard to develop or install and the cost of the systems ($160 to $200) is a small proportion (less than half of one percent) of the overall vehicle cost for most of these specialty cars. Finally, the analysis does not consider whether there are adverse unintended consequences related to the "Peltzman effect" whereby enhanced safety equipment might lead to greater risk-taking by drivers (or by those behind vehicles). This would appear to be an important consideration since some drivers will now believe that enhanced technology significantly reduces backover accidents, thus making them relax a bit more when backing up vehicles. Pedestrians (especially non-juvenile) might also behave with a greater (false) sense of security knowing that vehicles are equipped with enhanced technology.

A low and high range estimate of $3.5 and $8.7 million were substituted in place of $6.1 million as the value of a statistical life across 3% and 7% discount factors. Analysis considers three different economic values of lives to deal with uncertainty over valuing economic lives and used two discount rates to also acknowledge uncertainty over the correct discount rate. A Monte Carlo analysis assesses the effects of several uncertainties that affect costs.

All of the alternatives have negative net benefits, and the analysis clearly indicates this. The uncertainty analysis does not change this result. NHTSA mentions numerous benefits that are difficult to quantify, such as reducing pain and suffering that follows backover injuries and fatalities. Other possible benefits include reduction in anxiety or apprehension while backing up; improved ability to parallel park that may also decrease delays in traffic since drivers can more quickly parallel park; providing drivers with "other" information in visual displays such as safety warnings; reduced injuries/fatalities that might lead to less time lost on the job or at home; and other mental stresses/injuries that are avoided or reduced, especially when a driver injures or fatally strikes a child. NHTSA admits there is little information on how to value these nonquantified benefits but requested comments. Much discussion of unquantifiable results leads to the impression that NHTSA believes that, despite its conclusions that none of the systems tested were cost-effective or had positive net benefits, that perhaps this would be overturned with better information on those unmeasured benefits.

Equivalent lives saved, net cost, and cost per equivalent life saved for six backover systems were estimated (using both 3% and 7% discount rates) and three economic value-of-life estimates. NHTSA bluntly acknowledges that none of the systems are cost-effective. The uncertainty analysis does not change this result.

RIA concluded that there would not be a significant impact on small passenger vehicle manufacturers. No other discussion of cost incidence. There is no attempt to assess how costs are differentially borne with respect to income, age, type of vehicle owned, whether owning multiple vehicles matters or insurance rates.

Analysis mentions a variety of beneficiaries: erstwhile victims, their families, and drivers. The analysis notes that a large proportion of victims are young children. There is no other discussion of distribution of benefits.