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Consumer Risk Response and Consumer Protection: An Economic Analysis of Seat Belt Usage
Author(s) -
DARDIS RACHEL
Publication year - 1983
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/j.1745-6606.1983.tb00302.x
Subject(s) - seat belt , business , cost–benefit analysis , risk analysis (engineering) , actuarial science , marketing , operations management , economics , engineering , ecology , automotive engineering , biology
A utility analysis of decisions involving risk indicated that risk averse consumers would undertake a risk reduction strategy as long as the change in expected loss was equal to or greater than the costs of the strategy. Cost‐benefit analysis of seat belt usage was conducted to test this hypothesis. The results indicated that drivers of all size classes would gain from using seat belts in the case of low user costs while the drivers of subcompacts and compacts would gain in the case of higher user costs. However, less than one‐fifth of drivers wear seat belts. These results raise questions concerning the effectiveness of the informed buyer approach in areas of risk or uncertainty.