Market Faliure(Econ/Politics) - Essay Example

Safety belts stop occupants from being thrown out of the vehicle and guarantee they remain in the right place for the airbags operation. Airbags fill with air to reduce the impact of occupants with several interior parts of the vehicle. The most significant duty of the airbag is preventing the occupants’ heads having a direct impact with the door pillar and steering wheel (Leonard 23). This paper will look at the auto industry market failure because there is no tax to correct the externality of lack of car safety.

The air bag has been a controversial issue in the whole country for a number of years. The air bag’s ability to save numerous lives has turned it into one of the most efficient safety equipment in recent times. Nonetheless, like any other human invention, the air bag has its faults. Its fast release may be potentially dangerous to small people and young children. Nonetheless, in the modern society there is nothing like flawless technology. The airbag has saved almost four thousand people from death experience up to today.

Also, the safety belt has been exceptionally efficient in high speed accidents. Conversely, the airbag can still break (Flory 701). The law that has ensued the fitting of airbags in vehicles fails to provide solutions from consumer advocate groups, government regulation agencies, and vehicle manufacturers. The auto industry market failure is because there is no tax to correct the externality of lack of car safety. The consumer advocate groups, government regulation agencies, and vehicle manufacturers have failed to develop a solution dealing with the faults of safety belts, air bags, and other vehicle safety devices (Robertson 185).

These organizations and companies have been uncompromising for many years. In addition, there are several reasons that govern the individual safety organizations and companies. These reasons have dominated the choices they have taken in early times, in addition to the policies, or laws they choose to decline or accept, specifically those that deal with vehicle safety. The vehicle manufacturing companies are aware of the costs that accompany vehicle safety. They are not amused with the annual costs that vehicle safety device adds to their annual expenditures.

The automobile sector is competent in their marketing strategies. This is because they have turned the vehicle industry into one of the most successful and wealthy sector in the universe. In addition, the vehicle manufacturers of vehicles are aware that, in most instances, safety does not appeal to car buyers. The vehicle sector may prefer marketing the high speed horsepower in their automobiles than the automatic air bag and seat belt or any other safety device in the vehicles. From this perspective, speed is a more rewarding element in a vehicle than a seat belt, air bag or any other safety device in the vehicles (Kimes 39).

As in the past, the high speed horsepower will accrue more rewards than the vehicle safety devices. The consumers also do not demand the safety devices in the vehicles. The consumers are also thrilled with other features of a vehicle than the safety devices in a car. In addition, consumers do not see the need of paying for addition charges for devices that are already installed in the car. The consumers will not be willing to pay additional premiums on the safety vehicle devices until they are designed to their specifications. For