| Abstract: | Cost-benefit analysis is applied to an evaluation of two strategies for reducing risk from pre-1977 model year Pintos. The first strategy is a design modification which might have been undertaken by Ford in 1970 when the Pinto was first produced. The second strategy is the recall which was undertaken by Ford in 1978. The analyses of the two strategies were based on the costs of strategy implementation and the benefits from the reduction in accidents involving pre-1977 model year Pintos. The results indicated that the recall strategy was more cost-ineffective than the design modification strategy. Consideration was also given to a third risk response strategy which included no corrective action. |
