Cost-Benefit Analysis of the Electronic Stability Control in Japan (in Japanese)

Herbert Baum, Toru Fujiwara, Torsten Geisler, Yukihiro Kidokoro and Ulrich Westerkamp
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Herbert Baum: Institute for Transport Economics, University of Cologne
Toru Fujiwara: MEIKAI University
Torsten Geisler: Institute for Transport Economics, University of Cologne
Ulrich Westerkamp: Institute for Transport Economics, University of Cologne

No 09-07, GRIPS Discussion Papers from National Graduate Institute for Policy Studies

Abstract: In this paper, we conduct a cost-benefit analysis of the electronic stability control (ESC) in Japan. We first consider the current situation in which about 4.7% of all passenger vehicles were equipped with ESC in 2007. Based on our estimation, ESC saved 16 fatalities, 91 severe injuries, and 523 slight injuries, which would be caused by traffic accidents in 2007. The benefit and cost of ESC is estimated to be about 10.1 and 4.4 billion yen, respectively. Thus, ESC passes the cost-benefit test with the benefit-cost ratio of 2.3. We next consider a scenario in which the government introduces a regulation to forces all new cars to be equipped with ESC in 2014. Assuming that ESC-equipped rate increases to 55% in 2011, 75% in 2012, and 95% in 2013 by the regulation, we estimate that 64 fatalities, 519 severe injuries, and 2981 slight injuries will be additionally avoided between 2011 and 2014. Net social benefit of this regulation is 5.7 billion yen with the benefit-cost ratio of 1.2 in that period. We conclude that the penetration of ESC in Japan has been socially desirable, although the difference in traffic conditions makes benefit-cost ratio much smaller than preceding analyses in EU and US.

Pages: 18 pages
Date: 2009-06
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