COST-BENEFIT ANALYSIS OF TIRE RECALL CAMPAIGNS

THE PURPOSE WAS TO ASSESS THE POSSIBLE BENEFITS TO BE DERIVED FROM A COMPULSORY TIRE RECALL PROGRAM UNDER GOVERNMENT REGULATIONS AND THE PROBABLE COSTS OF SUCH A MANDATORY RECALL PROGRAM BY USE OF THE COST-BENEFIT ANALYSIS TECHNIQUE. THREE PROPOSED RECALL PROGRAMS WERE ANALYZED. ONE WAS REJECTED BECAUSE IT WAS INEFFECTIVE. TWO GENERAL RECALL SYSTEMS APPEAR TO BE EFFECTIVE ENOUGH FOR CONSIDERATION AND COULD BE IMPOSED ON THE TIRE INDUSTRY. ONE SYSTEM WOULD BE NOTIFICATION OF THE FIRST OWNER BY CERTIFIED MAIL; THIS IS ESTIMATED TO BE 90% EFFECTIVE AND TAKES UP TO ONE YEAR. THE SECOND SYSTEM WOULD BE RECALLING THROUGH STATE MOTOR VEHICLE INSPECTION; THIS WOULD BE 100% EFFECTIVE SINCE NO UNCHECKED SUSPECT TIRE WOULD PASS INSPECTION AND WOULD TAKE SIX MONTHS TO A YEAR, DEPENDING ON THE SYSTEM. THE "STAND BY" COST OF MAINTAINING THE DATA BANK FOR CERTIFIED MAIL NOTIFICATION OF FIRST OWNER WOULD BE AT LEAST 8 MILLION DOLLARRS PER YEAR. BENEFITS WERE ESTIMATED TO BE 88 LIVES SAVED PER YEAR; DISCOUNTED FOR 90% EFFECTIVENESS--80 LIVES SAVED PER YEAR. THE STANDBY COST FOR SUCH A PROGRAM IS 100,000 DOLLARS PER LIFE SAVED. SIMILIARLY, THE COST-BENEFIT RATIO RANGES FROM $4,640 TO $1,460 PER INJURY PREVENTED. CALCULATION OF THE COST-BENEFIT RATIO FOR THE ENFORCEMENT LOOP SYSTEM IS MORE DIFFICULT BECAUSE THERE WAS NO DEFINITE ESTIMATE OF MAINTENANCE COST AVAILABLE. IT WAS CONCLUDED THAT THE COSTS WOULD BE ALMOST NEGLIGBLE SINCE TIRE INSPECTION SHOULD BE PART OF THE REGULAR VEHICLE INSPECTION. UNDER BOTH SYSTEMS THE SPONSOR OF THE RECALL PROGRAM WOULD HAVE TO BEAR THE COST OF THE CAMPAIGN AND THE TIRE MANUFACTURERS WOULD HAVE TO MAINTAIN RECORDS IN THE PLANT SO THEY WOULD KNOW WHAT TIRES SHOULD BE RECALLED. UNDER A COST-BENEFIT ANALYSIS, IT DOES NOT APPEAR THAT A TIRE RECALL PROGRAM, WHICH TO BE ADEQUATE, MUST INVOLVE EXTENSIVE RECORD MAKING AND KEEPING, NOTIFICATIN PROCEDURES AND ENFORCEMENT PROVISIONS, WOULD BE JUSTIFIED IN TERMS OF BENEFITS TO BE DERIVED. THE TIME, EFFORT AND EXPENSE OF ESTABLISHING, MAINTAINING AND POLICING AN ADEQUATE TIRE RECALL PROGRAM COULD BEST BE DIVERTED INTO MORE CONSTRUCTIVE AND PROTECTIVE CHANNELS SUCH AS DRIVER EDUCATION OR THE PROPER USAGE AND REPLACEMENT OF TIRES, INCREASED AND IMPROVED SAFETY INSPECTIONS OF OPERATING VEHICLES, AND RESEARCH TOWARD SAFER TIRES AT MORE ECONOMICAL COSTS SO THAT THE USE OF BALD TIRES WOULD BE SUBSTANTIALLY REDUCED IF NOT ENTIRELY ELIMINATED. /SRIS/

  • Supplemental Notes:
    • Rept No 842, 121 PP, 3 FIG, 5 TAB, 49 REF
  • Corporate Authors:

    Princeton University

    Department of Mechanical and Aerospace Engineering
    Princeton, NJ  USA  08544
  • Authors:
    • Keenen, L T
  • Publication Date: 1968-6

Subject/Index Terms

Filing Info

  • Accession Number: 00201888
  • Record Type: Publication
  • Source Agency: Nat Safety Council Safety Res Info Serv
  • Files: TRIS
  • Created Date: Sep 21 1970 12:00AM