Everyday Economics

“Nobody’s reaction is the following: ‘Well, I was driving as carefully as rationality would dictate, and I am therefore comfortable with this outcome.‘”

As I pulled into the Whole Foods parking lot, I admittedly did so at a relatively quick clip to make the tail end of the green light. It wasn’t my most graceful driving maneuver, but it did get me into the underground lot 45 seconds sooner.

As I pulled in to find a spot, I noticed the car in front of me had one of those yellow ‘Baby on Board’ magnets with the cute cartoon face attached to the trunk. I hadn’t seen the car as I made my maneuver, but it got me thinking – if I had known that the car in front of me was carrying a baby, would I have decided to bite the bullet and wait an additional 45 seconds? The answer is, probably.

Those magnets act as a powerful reminder of the fact we shove out of our mind every time we get behind the wheel – that we are controlling a 2-ton vehicle that can do a lot of damage to ourselves and the people around us. The fact that there is potentially a baby on board is a stark reminder of the fragility of life and the dangers of driving.

What does this tell us about driving from an economic lens?

Let’s assume that everybody drives with a degree of care that is ‘rational’. We know that people make decisions all the time which reduce the care of their driving and increase the likelihood of an accident – speeding, eating, drinking, texting, yelling at the kids – the list is endless. If you engage in these behaviors, it’s because they provide some kind of benefit that outweighs the cost (with the cost being the increased probability of an accident).

At this point, everything seems rational – we might not agree with where everybody draws the line regarding their driving behavior, but it certainly seems sensible. Everybody is as careful as they think is worthwhile. If they have a crappy car, good insurance, or are driving with a baby, all of this will impact their cost/benefit structure, and they will alter their driving behavior accordingly.

But where does this thinking fall short? Well, in reality, when an accident actually happens. It could be something as gentle as a parking lot love tap or as serious as a total loss, but I am willing to bet that no matter the incident, nobody’s reaction is the following:

“Well, I was driving as carefully as rationality would dictate, and I am therefore comfortable with this outcome.”

That would be absolutely ridiculous (although if you have ever met somebody who responded to an accident like this, please point them towards this blog as they would likely enjoy it.)

The response you will almost exclusively find is the phrase “I really wish I’d been more careful.”

This implies that people drive in a way they only think is rational. When the chickens come home to roost (so to speak), they’ll realize that they really, truly, wholly dislike the chickens, even more than they thought they would.

As such, it would appear that people consistently make suboptimal decisions about driving. They aren’t as careful as they should be, even when only considering the cost to them personally (most people don’t seriously take into account the impact on the other driver and passengers, which is a whole other externality)

Given this insight, it would actually seem a public service if we could get people to drive a little more carefully and provide them with a gentle reminder that the cost of an accident is actually higher than their current rationale suggests.

And as such, I would like to posit the recommendation that every driver put a “Baby on Board” sign on their car (don’t worry, I checked, and it’s legal in the US regardless of whether you have an actual baby on board). This little action will cause drivers that interact with you on the road to increase their care ever so slightly. Yes, this might be an inconvenience (although if it is, truly a very minor one), but it is an inconvenience that if people were truly being rational, they would be taking on regardless. It keeps them safer, and it also keeps you safer. Regardless of your personal driving habits, if the people around you are being more careful, your personal likelihood of an accident decreases.

Let me caveat by saying that if everybody did this, the ‘signal’ provided by a Baby on Board sticker would become diluted to the point of inefficacy. If suddenly everyone had a sticker on their bumper, and it became clear to everyone that no babies were indeed on board, the stickers would no longer generate the same impact on driving behavior. That being said, I somehow don’t believe that this article will generate enough views for this to become a problem.

And if somebody asks you about the baby on board, and you admit that it’s simply a rational ruse to keep people safer, reactions may vary. You may get a laugh, a dirty look, or perhaps even a spiteful love tap on the bumper just to prove a point. But, rest assured, if they are rational, they’ll eventually get a ‘Baby on Board’ sticker as well.