|
From an economic perspective, the optimal number of squished cyclists is greater than zero, and the optimum level of helmet-wearing is less than infinity - even when the "external" costs associated with Medicare, grieving friends and relatives and guilt-ridden drivers, and unanticipated private costs are considered. How may the optimum safety/utility trade-off be attained? A principle of Optimal Loss Prevention* is that the person in the best position to know (and take action to affect) the risks of a particular source of loss should be liabile for that loss. Given that cyclists' cranium thickness levels are unobservable to motorists, motorists safety/utility trade-offs ideally should reflect the average costs of collisions they cause related to this vicitm characteristic - not the specific costs incurred in a particular incident due to this unobservable factor. Rather, in theory, the onus for taking into account variations in cranium thickness around the average should rightly fall on the shoulders of cyclists! Thus, cyclists with thin skulls should either wear a thicker helmet, take a less heavily trafficked routed, procure some top-up insurance (knowing that the average court payout will not cover their full loss) ... or take a taxi. TN
* See PC, Product Liability, 1990, Appendix B (http://www.pc.gov.au/ic/inquiry/04liability/finalreport/index.html)
| 
