Airbag Benefits, Airbag Costs 2004-01-0840

This paper estimates that currently there are 250 million frontal airbags in the United States, which cost their owners $54 billion. In 2003 about 1.7 million of these deployed, 19,000 in fatal crashes in which over 8,000 vehicle occupants were killed sitting in seats protected by airbags that deployed. To date over 40,000 occupants have been killed sitting in seats protected by airbags that deployed. The growth of airbags increases the need to revisit the question of their cost-effectiveness, and also provides the data to do this. The cost-benefit comparison presented here relies on airbag effectiveness estimates and injury cost estimates published since 2000. Even after the deployment of 10 million airbags, their effect on injury risk remains uncertain, and the results presented here are sensitive to the injury-effectiveness values assumed. The benefits of airbags from changes in risk (fatal and injury) are estimated to be $1.60 billion for drivers and $0.34 billion for right-front passengers. The annual cost of replacing airbags after deployment is estimated as $0.46 billion for driver airbags and $0.47 billion for passenger airbags. For passengers, annual replacement costs alone exceed benefits. For drivers there is net annual benefit of 1.60 – 0.46 = $1.14 billion produced by airbags that cost $30 billion. This cost can be considered approximately $3 billion per year over a 10-year vehicle life. This cost exceeds the $1.14 benefit by almost a factor of three, indicating that the driver airbag falls short of being cost effective.