Tag: IIHS

Why is it so hard to buy things that work well?

Mary Pat Campbell

Link:https://danluu.com/nothing-works/

Excerpt:

It’s also true at the firm level that it often takes an unusually unreasonable firm to produce a really great product instead of just one that’s marketed as great, e.g., Volvo, the one car manufacturer that seemed to try to produce a level of structural safety beyond what could be demonstrated by IIHS tests fared so poorly as a business that it’s been forced to move upmarket and became a niche, luxury, automaker since safety isn’t something consumers are really interested in despite car accidents being a leading cause of death and a significant source of life expectancy loss. And it’s not clear that Volvo will be able to persist in being an unreasonable firm since they weren’t able to survive as an independent automaker. When Ford acquired Volvo, Ford started moving Volvos to the shared Ford C1 platform, which didn’t fare particularly well in crash tests. Since Geely has acquired Volvo, it’s too early to tell for sure if they’ll maintain Volvo’s commitment to designing for real-world crash data and not just crash data that gets reported in benchmarks. If Geely declines to continue Volvo’s commitment to structural safety, it may not be possible to buy a modern car that’s designed to be safe.

Most markets are like this, except that there was never an unreasonable firm like Volvo in the first place. On unreasonable employees, Yossi says

Who can, and sometimes does, un-rot the fish from the bottom? An insane employee. Someone who finds the forks, crashes, etc. a personal offence, and will repeatedly risk annoying management by fighting to stop these things. Especially someone who spends their own political capital, hard earned doing things management truly values, on doing work they don’t truly value – such a person can keep fighting for a long time. Some people manage to make a career out of it by persisting until management truly changes their mind and rewards them. Whatever the odds of that, the average person cannot comprehend the motivation of someone attempting such a feat.

It’s rare that people are willing to expend a significant amount of personal capital to do the right thing, whatever that means to someone, but it’s even rarer that the leadership of a firm will make that choice and spend down the firm’s capital to do the right thing.

Economists have a term for cases where information asymmetry means that buyers can’t tell the difference between good products and “lemons”, “a market for lemons”, like the car market (where the term lemons comes from), or both sides of the hiring market. In economic discourse, there’s a debate over whether cars are a market for lemons at all for a variety of reasons (lemon laws, which allow people to return bad cars, don’t appear to have changed how the market operates, very few modern cars are lemons when that’s defined as a vehicle with serious reliability problems, etc.). But looking at whether or not people occasionally buy a defective car is missing the forest for the trees. There’s maybe one car manufacturer that really seriously tries to make a structurally safe car beyond what standards bodies test (and word on the street is that they skimp on the increasingly important software testing side of things) because consumers can’t tell the difference between a more or less safe car beyond the level a few standards bodies test to. That’s a market for lemons, as is nearly every other consumer and B2B market.

Author(s): Dan Luu

Publication Date: March 2022, accessed 7 Jun 2023

Publication Site: Dan Luu

‘Retirement vehicles’ raise the risk of crash fatalities for older drivers

Mary Pat Campbell

Link:https://www.iihs.org/news/detail/retirement-vehicles-raise-the-risk-of-crash-fatalities-for-older-drivers

Excerpt:

Two new studies show that drivers 70 and over tend to drive older, smaller vehicles that are not equipped with important safety features. The first study compared the vehicles driven by 1.5 million crash-involved Florida drivers ages 35-54 and 70 and older over 2014-18. The second surveyed 900 drivers in those age groups from various states about the factors that influenced their most recent vehicle purchase.

“Persuading older drivers to take another look at the vehicles they’re driving could reduce crash fatalities substantially,” says Jessica Cicchino, IIHS vice president of research and a co-author of both studies. “One big challenge is that, for those on a fixed income, cost often overrides other concerns.”

The study of Florida crashes found that drivers in their 70s and older were significantly more likely to be driving vehicles that were at least 16 years old than drivers ages 35-54. The older drivers were also substantially less likely to be driving vehicles less than 3 years old.

Publication Date: 7 Dec 2021

Publication Site: IIHS

Older Drivers Are More Likely To Die Driving Older Cars

Mary Pat Campbell

Link:https://jalopnik.com/older-drivers-are-more-likely-to-die-driving-older-cars-1848181524

Excerpt:

The average age of cars on the road keeps going up, and as these cars get older they are becoming less suited to the drivers most likely to own them. A new study from the IIHS says that older drivers are at much greater risk of getting hurt or killed in their so-called “retirement cars.”

According to the study, drivers 70 and over are sticking with their older cars, which lack modern safety features. As driver age goes up, so does the likelihood of death in accidents by some pretty staggering figures. Drivers who are over 75 are four times as likely to die in a side-impact crash, and three times as likely to die in a frontal crash than drivers who are middle-aged, per the IIHS.

Author(s): José Rodríguez Jr.

Publication Date: 8 Dec 2021

Publication Site: Jalopnik