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EG2401 Tutorial 3 Ford Pinto case (d) Is it appropriate to use cost-benefit analysis to justify the Pinto design?

Utilitarian approach: cost-benefit analysis- (No) Issue: 1. Ford claims that Pinto met all applicable federal safety standards at the time by using costbenefit analysis. Through the analysis, they assessed that the cost of improving the design ($11 per vehicle) is higher than the social benefits. Problems of the analysis: 1. Can a dollar value be placed on human life? Ford places a monetary value on human life, which is only $200,000 per life. On the other hand, injury is monetised to be $67,000, one-third than that of death. Is the human life worth that small amount? 2. Difficulty and ambiguities in determining the costs and benefits of certain factors. Ford estimates the number of deaths and injuries to be both at 180 while number of burned vehicles to be 2100. While under the cost section, Ford has 11 million cars and 1.4 million light trucks to be modified in order to ensure the safety of the Pinto. If there were to be 12.4 million Pintos, the number of accidents could be well above 180 or 2100. Therefore, this presents ambiguities in the analysis. 3. Difficulty to predict what factors will be relevant in the future. (long term costs and benefits) Although the Ford Pinto met the current standards, it fails in 11 out of 12 rear-end collisions at the newly prescribed 20-miles-per-hour crash test. If Ford factored in the lawsuits and compensations they might face if no changes are to be done to the current Pinto design, the benefits might not outweigh the cost of changing the current design.

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