In general less safe cars do not create, in an economic sense, technical externalities. These externalities are a result of market failure, meaning that a benefit or harm is passes to a third party uncaptured by the market pricing. Typical examples are that the use of any commons (e.g. free fishing grounds, pollution of air and water, use of 'free' ground water resources) wherein their are no discrete property rights established.
We're splitting hairs a bit. The choice of an unsafe car simply isn't IRL captured in health insurance premiums, but they will impact healthcare costs.
A negative externality is a cost that is suffered by a third party as a result of an economic transaction. In a transaction, the producer and consumer are the first and second parties, and third parties include any individual, organisation, property owner, or resource that is indirectly affected.
Whether you think the 'unsafe cars not priced for health insurance' meets the definition, the point remains the same. There is a cost to driving unsafe wrecks that will be born by a third party whose insurance or healthcare costs go up commensurate with the added costs of treating someone with brain damage who in a safer car has a bruised shoulder from the seatbelt or facial bruises and scrapes from the airbag. Insurance COULD account for that risk
but does not.
That any market participant, by virtue of participating, has an affect on demand and therefore market price/profit margins is not of this nature - there are no uncaptured benefits or losses. Without government interference car and medical insurance is based on individual and group risk assessment, all of which is captured in a free market. Regardless of whether or not an employer plan adjusts for each an individuals lifestyle, as a whole the costs of risky behavior of a group is captured.
Your argument is essentially saying that by virtue of one's existence it affects "somebody" therefore one is subject the will of all others, and therefore one has not actual right to act on behalf of of one's own well being. Right?
You agree that "one is subject to the will of others" when it comes to pollution, so you're not actually arguing a principle here, or agree with me in principle, just not when to apply this principle.
As for us being "in this reality", that's arguing that the status quo should always be accepted, which I doubt you'd support. In any event, disagreement with CAFE and Safety standards is based on the presumption that "this political reality" is wrong, and should be changed to a new reality closer to that of reduction or elimination.
No, it's arguing that type/safety of car hasn't ever in history been a part of the price of health insurance, and I see no chance at all, 0%, of it becoming part of the underwriting process for medical insurance given how employer health insurance works, because it would then require certifications on that, mandatory notices for new car purchases, etc., nor can it be realistically included for Medicare, Medicaid, VA, CHIP. So given the actual choices, standards for auto safety seem in fact to be good policy- the best of the available alternatives.
First, remember that CAFE standards have been hijacked...
Second, CAFE doesn't do much to prevent CO2 pollution, in part because the better the MPG the more driving is encouraged....
Third, CAFE standards as set by the Obama administration were irrational....
So for all these reasons, CAFE is CRAP.
Data would help make that case.
The Unintended Consequences of Ambitious Fuel-economy Standards
The “rebound effect,” he explains, comes when drivers of more fuel-efficient cars decide to take advantage of their lower per-mile fuel costs by driving more than they did in the past Twitter . “Typical estimates of the rebound effect are about 10%,” van Benthem says. That is to say, “people drive about 10% more [miles] when they switch to a vehicle that is twice as fuel efficient.”
That's still a very large net savings in fuel consumed. Next they look at higher CAFE standards on used cars:
The Leakage Effect
What’s the overall impact on emissions? Using a huge database of information about used vehicles, van Benthem and Jacobsen find that “about 15% of the emissions reductions [resulting from higher standards imposed on] new vehicles come back as a result of the increased consumption of fuel on the part of older vehicles still on the road.”
They don't make an overall estimate but my reading is the CAFE standards have about 75% of the impact predicted as if there was no change in behavior. So that's still a significant savings in fuel consumed, emissions, etc.
