FTC Staff Comment to the Hon. John L. Dingell Concerning S. 863 to Study Auto Crashworthiness Rating System
us-ftc-advocacy-filings-4eebf183b55260770aa07a9b359cf677FTC Staff Comment to the Hon. John L. Dingell Concerning S. 863 to Study Auto Crashworthiness Rating SystemAdvocacy Filing
Matter Number
P864659
FEDERA~ TRADE COMMISSION WASHINGTOr-... D. C 20;) 80 C.?ng r e ss~r,~:-. j 0:1:; D. Di:-:;.::':"':" Chairma~, Co~~itt~~ o~ Ener~y a~d Com~€rce U.S. H~~s~ ~f ~e~re3e~tati~es Ra~'jJrn H~~SE Of~ice BJilJins R;)':)::-, 22. 2 ~j -- r - - - ~'~_'_J ~~ ar~ plea5~j ~~ responC to jour request for the views of t~~ Federal Trade Co~~issior on the proposed study of the f~33~oi~i~! of developing a s~'st~~ for annual crashworthiness r3~ing of all new automobiles. This proposal is contained in ~. oC;" t~le ";~ational ~ig:;",'a~' Traffic Safety Adninistration AJt]nriz5:':ion Act 0: 198:>," w;,ich was passed by the Senate on :-:'=:i' ':'::J, lSlSi). Q~i=~ clearlj, r~liable crashworthiness information could ~ave ~re~t value, at least to so~e consumers. The central issue t~at W~~~] nee~ tc ~e ajjressed by the proposed study is whether a~to srashworthiness t~st~ wo~ld pro~ide consumers with enough a,j:::i t~')';d':" i:l:::oril,c:tio~, b~yo~d t;1at already available, to justify t~~:r expen5e. We thin~ that the study should address several fd2t0:3. So~~ of these appear to be covered by section 303 of s. 803. Ot~~e~s, h8wever, ~a~~ not be covered. '::':-:c: st ..JJ~· s:Jou::'c ::'egi:-. by eval\.lating existing information, W:~"'C-. t:l'O:;j should be corrcpared with the types of information that w=~:~ ~~ o~tained fr~~ the proposed program. Some information aoo~t ve;~ic~e performan~e in accidents is already available to c::'~s.j;-:-,::rs. For exa:i1;?:'e, t:1e Highway Loss Data Instit.Jte ?J~:i3;les data o~ the re~a~ive freque~cy of in~Jr±es and r~l~tive se~~rl:~' of r~?alr3 for dl:ferent vehIcle mode~s. In addItlon, so~e a~to ~anJfacturers advertise the safety featJres of their 1 See, e.g., "BLDI I~jury and Collision Lc.ss Experience: Cars by ;-la"e a:ld Model," pamphlet published by the Highway Loss Data Instit~te, August 1935.
Congress~an John D. Dingell 2 automobiles. 2 Clearly there are limitations to the usefulness of these other sources. Insurance data, for example, will be ahfected by the d 3ivin g habits of the people who purchase a p~rticular model. However, the mere fact that there:are l~mitations to the usefulness of existing data does not n~cessarilj esta~lish a need to expend resources to produce additional information. Dse~~lness of Additional Information A stJoy of tile desirability of a testing program should seek to identify the ways in which consumers would benefit from the improved data on crashworthiness and to determine the value consumers place on these improvements. While we do not know at this point exactly how useful additional information on cras~worthiness would be to consumers, we can identify a number of ways in which they could potentially be benefited. Consumers mig~~ find it easier to learn about the relative safety of variouS makes and models of automobiles and would not need to spend as much time and effort learning about safety. With im?roved information on vehicle safety, consumers may also be able to more accurately identify the cars that most closely satisfy their preferences for vehicle safety. Further, the availability of better information on vehicle safety may encoura:Je ma;IJfacturers to provide safer cars. To the extent 2 Car size also provides some evidence about relative safety since consumers appear to be aware that, while there are exceptions, large cars generally provide greater protection than sl13l1 ca~s. 3 ~: fewer owners of sports cars than of four-door sedans use se3: oelts or if drivers of sports cars drive less cautiously, this will tend to make sports cars appear to be less crashworthy tl,an would a comparison based solely on the characteristics of t~e car. In addition, insurance data cannot be available at the time new models are introduced. This, however, may not be a serioJs shortcoming. In their 1985 pamphlet on the crashworthiness of different vehicles, the Highway Loss Data InstitJte states: "The injury and collision loss experience of the cars shown in (this pamphlet] is based on model years 1982-84 but provides a good prediction of the experience of current models of the same cars. This is because the loss experience of particular cars generally is consistent from one model year to another." (Ibid.)
Congressman John D. Dingell 3 consumers used accurate information to purchase safer cars, benefits would presumably include lower injury and fatality r~tes. Any study should consider how and to what degree each of toese benefits would be realized as a result of a manaatory...testIng program. Adequacy of Testing Procedure To be usef~l to consumers, comparative crashworthiness tests must provide consumers with an adequate level of information concer~ing a vehicle's likely performance in actual accidents. If the tests conducted do not sufficiently reflect comparative performance in real world crashes, publication of such test res~lts may cause consumers to choose vehic~es that provide a different level of safety than they desire. This could substa~tially reduce the benefits of any testing program, perhaps eve~ making t~e benefits negative. Thus, an important focus of a~y study of the desirability of a mandatory crash testing pr~gra~ should be on the ability of any test procedure to provide results that are well correlated with real world crash experience. Limitations on Test Results Consu~ers must be made aware of any significant limitations associated with the test results. Even if the results provide i'1f,nmati,")n about the performance of vehicles in real crash situ3tions, there will be limitations to the precision of these esti~ates and to the uses to which this information should be put. For example, as we understand it, the crashworthiness res~~~s of the experimental New Car Assessment Program, currently conducted by the National Highway Traffic Safety Administration (~HTSA), can ~e used only to compare vehicles of the same size. The results cannot be used to compare the performance of a large car wit~ that of a smaller car. In addition, it is unclear whether test results are valid across body types (such as two- 4 This could occur if consumers mistakenly rely on the results of the required crashworthiness tests rather than on other, more accurate, information available to them. If consumers are aware that the results of the required tests do not provide information about the performance of vehicles in real accidents, then they will not use this information in making purchase decisions and will therefore not be led to make a wrong decision. However, in this case, there would be no benefit from the testing program.
Congressman John D. Dingell 4 door and fo~r-door versions of the same model).5 Thera may also be variability in test resutts between two vehicles of the same m~ke, model, and body type. ;.- If consumers are unaware of significant limitations on test r~sults they may rely too heavi~y on the tests and discount other evidence that is more reliable. As a result they may not purchase the vehicle that best satisfies their preferences. Thus any study will need to evaluate the limitations of the testing procedure and will need to assess how these limitations can be com~unicated to consumers. It is not necessary, however, that 311 varia~ility in test results or other Ximitations on the usefulness of crash test data be eliminated before the data can be of value to consumers. It is only necessary that consumers know of the limitations of the data so that they can determine ho~ much reliance to place on it. Tne Costs of Crashworthiness Testing A study of the feasibility of requiring a crashworthiness testing program should consider the costs of the program and attempt to estimate the magnitude of these costs. The first cost that should be co~sidered is the direct cost of conducting the tests. Based on the costs of NHT5A's current experimental New Ca~ Assessment Program, it appears that the direct costs of per:orming the tests would be over $5 million per year, assuming ~ nearin3 before the Subcommittee on Telecommunications, Consumer Protection, and Finance of the Committee on Energy and Co~~er2e, U.S. House of Representatives, 98th Congress, 2nd Session, on H.R. 6076, August 8, 1984 (Serial No. 98-165) (Hereafter "Hearings"), p. 215. Thus, tests may have to be performed on all, or a large number of, models to ensure accurate results. 6 The National Highway Traffic Safety Administration has confirmed that there is variability in the results of their current testing procedures and has identified several factors that can cause this variability. See Hearings, pp. 245-247. 7 T~is ~ay be particularly likely to occur in a program where the government is endorsing the testing. Consumers may believe that the results are more reliable because of the government support of the program.
Congress~an Jo~n u. Dingell that a single test for each model and body type gffere q would provide adequate information on crashworthiness. 5 !4 _ : However, i~ is not clear that a single test would be sUfficient to produce reliable information on crashworthiness. I~ there are significa~t variations in test results between two vehicles of the same make, model, and body type, it may be necessary to perform multiple tests to obtain geliable estimates of the average crashworthiness of the vehicle. In addition, testins in a single crash configuration -- e.g. crashing the vehicle into an i~mo,able barrier at 35 miles per hour, which is the test configuration used by NHTSA in its New Car Assessment ?ro9ra~ -- ma~T not provide sufficient information about safety in the variety of crash situations encountered in the real world. It may therefore be necessary to conduct several crash tests and co~bine the results into an index based on the likelihood and seriousness of each type of accident. If it is necessary to conduct multiple tests of each vehicle model and body type, the d~r~ct costs of the tests, of course, would be some multiple of the cost estimated above. T~ere would alsa be costs involved in disseminating the resJlts of the tests to consumers. These costs should be esti~ateJ as part of a feasibility study. The mandatory testing pro;ra~ migh~ also resul~ in delays in introducing new vehicles i: t;l~ testin; progra~ requires significant amounts of time to co~plete. 6 ~HTSA estimates that it costs $20,000 per vehicle, including the cost of purchasing the vehicle, to conduct this test. (~eari~3s, p. 263). For the 1984 model year, there were 277 different combinations of models and body types of cars sold in the u.s. (Hearings, p. 248.) Therefore, if the crashworthiness testing program had been required far 1984, and if adequate data cou~J be generated by testing only one vehicle of each model and body type, the total cost of the crashworthiness program would have been in excess of ~5.5 million. 9 The number of tests needed to obtain a reasonable estimate of the average performance of a particular model would depend upon the amount of variability in the test results and the degree of uncertainty that is judged to be acceptable in the published test results. The number of tests may also depend on the degree to whic~ an] variability in results is the same for all models. If the variance of test results is not the same from one model to tile nex~, it may be necessary, at a minimum, to conduct several tests on each model in order to determine whether the results for this model are subject to large or small variations.
Congressman John D. Dingell Effect on Number of Models Available 6 ~ It is important to note that the costs of the tests would n&t impact equally on every car sold. Rather, the costs would be tffe same for each model offered. As a result, the costs per v~hicle would be higher for models that sell in lower quantities. If the cost of testing an additional model is great eno~gh, manufacturers may not find it profitable to offer as many models as they currently do. Thus, a study of mandatory crash testing should consider whether the testing program would lead to a decrease in the number of models of vehicles offered and the value consumers place on the availability of any models that might be disco~tinued. Potential Inhibition to Future Improvements in Safety A serious concern, which would be difficult to quantify, is the danger that government adoption of a testing procedure for deterreining crashworthiness may inhibit rather than promote future improvements in auto safety. There are several ways in which such a problem might arise. If a standardized way of determining crashworthiness is established, this could create incentives for manufacturers to concentrate on making changes that will improve their vehicles' performance on that particular test, rather than on making possibly more important safety changes that involve aspects ~D the vehicles' performance that are not covered by the tests. Adoption of a standard test may si~ilarly reduce innovation in procedures for testing vehicle sa:etj. Governmental adoption of a particular approach to testing rna} reduce the incentive to develop alternative testing proceu~res even though the ne\v procedures could provide a better ~eaSJ[e of real world experience. ?ot~ntial 3ffect on Tort Law The proposed study should also consider the consequences of th~ proposed crashworthiness tests for our system of tort law. If the crdshworthiness index were to be interpreted by state COJrts as informing purchaser expectations about automobile safetj, for exa~ple, it might measurably hinder a product liaoility action on the part of the driver of a relatively unsafe 10 Of course, if a manufacturer develops a safety feature not measured by the tests, it can petition the government to change the tests or can advertise the feature as providing additional protection. The counterweight to the concern expressed in this paragraph is that to the extent manufacturers make safety- enhancing design changes that would not have been made but for the existence of the test, positive benefits would result. I j II i
Congress~an John D. Dingell car, or might measurably support a warranty action against the manufacturer of a supposedly safe car that failed to perform as Jx~ected. - - whf are the Tests Not Voluntarily Conducted? 7 . . A final issue that should be considered by those examining the desirabilitj of mandatory crash testing is why the proposed crashworthiness tests are not voluntarily conducted by insurance companies, auto producers, or other private parties who could the~ benefit by selling the information on relative crashworthiness or by advertising the attributes of their particular vehicles. For example, if consumers would value the results of this type of testing, one might expect manufacturers with relatively safe vehicles to conduct the tests and use the resJlts to promote their vehicles. Why does this not happen more frequently? Is it because these tests cannot be reliably perforrr.ed? Is it an indication that the tests provide little inforrr.ation about relative safety beyond that already available? Or is there some problem that keeps these tests from be~:1; provided bj the market even though consumers would value the information? ~e do not know the answer to these questions, an3 the; should be examined by the proposed study. We recommend that t~e proposed study carefully evaluate the concerns that we have identified. We hope that you will find t:le.,;,;? thO.lg:ltS helpful in your deliberations concerning this pr~posal. Please contact us if we can be of further assistance. 5y direction of the Commission. ~g--min I. Berman g Secretary
