Certain things
when made obligatory invite a recoil. An instance which is observed quite often
when helmets are made compulsory for two wheeler riders. The rule is often in
the rule book yet the enforcement keeps waxing and waning. Once in a while, the
government issues a strict notice of wearing helmets, usually counter-reactions
verbally hostile follow and after a cooling off period, the enforcement turns
lax.
Yet it is
interesting to decode why the rule is essential. It is obvious wearing helmet
improves personal safety and thus it should be in one’s own self-interest to
wear a helmet voluntarily without a need for a rule. At least rationality in
economics would assume so. However, life is not shades of white and black but
shades of grey. To each individual it is the personal cost-benefit decision
that matters. There is obvious discomfort in wearing a helmet. It might be so
that it acts as a barrier to side view and to hearing. The benefits is
obviously increased safety in case of accident. To an individual rider however,
the costs would be borne daily, yet the probability of the accident is quite
low in normal course of time. The heuristics probably signal higher marginal
costs for every perceived additional unit of benefits. Despite low probability of the event, the occurrence
might entail heavy consequences including loss of life. The externalities of
the incidence would extend to the family members and dependents of the
individual in question. These externalities are ignored given the cognitive
constraints hitherto present in decision making of an individual. There is a
divergence between personal interest and family and extended family interest. The
divergence has to be bridged and therefore the legislative and executive
interventions are necessitated from the state and local authorities. Therefore the
helmets are made obligatory with violations attracting heavy penalties.
The same principle
holds good for compulsory seat belts in cars. For a driver or a passenger it
might give a feel of freedom to drive without a seat belt on, the probability of
accident being low. Yet as observed in the above example, the divergence arises
between individual interest and collective family and extended family interest.
Safety gear are
observed at critical construction and production sites. These are perhaps an
answer not just for bridging divergences between family interest and individual
interest but also between firm interest and individual interest and across
individual interests. The firm would enhance its reputation when it scores high
on safety. For a firm with low incidence of work related accidents, injuries
and deaths, there is certain sense of prestige that can translate into brand
reputation. Violations are penalised heavily and the firm might actually be
forced to terminate its operations in case of work related accidents. The costs
are explicit while the benefits are implicit. Therefore to a firm, ensuring
safety becomes vital and thus a stress on safety equipment. The lack of
enforcement however would change the dynamics of costs and benefits. The costs
would turn to be lower than anticipated with little explicit benefits. In the
given context, safety guidelines are given a go by.
In large
countries like India, externalities are localised, benefits are implicit thus
low premium for safety measures. The enforcement given the paucity of manpower essential
to monitor adds to the woes. It is no wonder why accidents like recent fire in
Delhi building, Upahaar film tragedy, Bangalore circus fire, Mandi Dabwali
school fire etc keeps happening. The solution would be transforming the cost
benefit analysis. The costs should be high enough to ensure minimum laxity in
safety measure. The high fines on violations of traffic and related rules might
seem harsh prima facie but become essential to ensure the safety measures on
track. In case of drink and drive, it is not merely individual self-interest of
thrill of proving manliness, it is at the expense of others who might come in
the way of your eager to prove manliness.
Safety measures
are not just for shops, buildings, fire safety, driver and passenger safety,
air passenger safety etc but are imposed as compulsory in sports activities.
From ice hockey where helmet wearing is compulsory (individual self-interest of
playing better without helmet and subsequent high rewards of victory against
personal safety both immediate and long term of being hit by opponent’s stick) to
boxing etc. are pretty common.
It boils down to
an individual perception of his or her safety as opposed and linked to safety
of others. Alternately, it also boils down to likely immediate rewards in
discarding safety measures as opposed to personal long run health
externalities. The cognitive constraints driving towards bounded rationality
often create a barrier in skewed decisions away from safety perspective. Therefore
an external intervention in mandated. Therefore a Pigouvian intervention in
terms of monetary and non-monetary costs become vital in ensuring the people
not deviate from their personal safety interests.
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