These two cases were examined at two discount rates (5% and 10%) which generated four permutations in total. More specifically, the basic outputs for the analysis relied upon four Kaldor-Hicks Tableaus (representing two impact cases and two discount rates), as indicated in Table 1 and Table 2 respectively. Aggregated net-benefits are represented in the lower right-hand bottom cell and the rest of the tableau illustrates the manner in which each of the major stakeholders is affected according to the statistical analysis.
Fundamental assumptions included the following specific types of economic benefits and costs associated with the proposal:
Benefits — prevention of consequences of vehicular accidents caused by cell phone use, prevented loss of human life, prevented medical costs necessitated to treat accident victims, prevention of property damage, prevention of lost work productivity, prevention of lost wages, and prevention of court costs necessary to administrate justice after the fact.
Costs — Lost consumer surplus on avoided calls, equipment design, installation, and implementation, program start-up costs, enforcement costs, and increased cost of new vehicles to consumers.
The initial design of this proposal called for a gradual implementation that relied on the eventual turnover of the entire national fleet of privately-owned passenger vehicles. Upon further consideration of the issues and the cost savings involved, it would be more appropriate to invest in the same technology in an add-on format with a mandated date of implementation regardless of the manufacture year of automobiles.
The consequences of delay are is simply too significant to postpone full implementation by as much as a decade or more, since many consumers typically retain at least one of their vehicles that long. In fact, it could be anticipated that some consumers would do so purposely precisely to avoid complying with the new legislation. Ultimately, the preferred approach would be for the federal government to exercise its authority over interstate commerce under the Commerce Clause of the U.S. Constitution to enact legislation banning cell phone use by drivers immediately in conjunction with the more gradual technological solution detailed in this proposal pursuant to a scheduled compliance date for automobile manufacturers as described herein. In light of the obvious benefits, it is recommended that the program be initiated as soon as possible.
Cohen, J.T. And J. Graham (2003). A Revised Economic Analysis of Restrictions
on the Use of Cell Phones While Driving. Risk Analysis 23(1): 5-17.
Hahn, R.W., & Tetlock, P.C. (1999). The economics of regulating cellular phones in vehicles. Washington, DC: American Enterprise Institute-Brookings Joint Center for Regulatory Studies.