Price linked to car safety. . .
Recently, I read an interesting article concerning some of the most unsafe cars. According to the unsafe cars article, it said that the Insurance Institute for Highway Safety gave poor ratings to econo cars such as the Optima, from Kia, and the Elantra, from Hyandai. The article also noted that although optional in cars, side air bags can dramatically improve the state of safety within a vehicle. After reading this article, there are several economic concepts that come to mind. In a market full of relatively affordable commodities, such as the Optima, and Elantra, people are willing to buy an inperfect product, because the price is right. However, there are also those that are willing to pay a high price for a distinctive quality factor, and in the case of most higher priced cars, that generally equates to higher safety. One class of cars, the economy variety, seems more elastic, if a car increases features, but substantially increases the price, certain buyers are likely to purchase a cheaper car instead. For those that don't put a price on safety, higher priced cars, or safer cars are generally more inelastic, and if the price goes up, but safety features improve substantially, buyers will still keep buying that car. It is amazing to look at the world in terms of what money can buy. If money isn't an object, one can attain nearly anything, from a safer vehicle, better education, or even great healthcare. While some people's quality of life is related to how hard they work, others' is simply a factor of money, whether earned, or inherited, and while even the richest person in the world has "limited resources", it is interesting to see how those resources can improve their life, and available opportunities.
Posted by Morgan at 10/29/2005 07:27:00 PM