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An Economic Analysis of Requirements to Prevent Handheld Hair Dryer Water Immersion Electrocutions in the USA

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Abstract

Before 1987, when handheld hair dryers were not required to protect against water immersion electrocutions, there were almost 16 such electrocutions annually in the USA. This article presents a retrospective evaluation of the benefits and costs of the 1987 and 1991 immersion protection requirements of the voluntary hair dryer safety standard in the USA. The benefits are based on estimates of the reduced risk of electrocution resulting from the requirements, and the valuation of the reduced risk derived from willingness to pay studies of the “value of statistical life” found in the economics literature. The costs were defined as the incremental costs associated with incorporating the immersion protection technology into handheld hair dryers. The study found that the requirements were highly effective and may have reduced the immersion-related mortality rate by almost 97%. The expected present value of the estimated benefits of the requirements amounted to about $4.56 per dryer in 2014 dollars and substantially exceeded the costs of about $2 per dryer. The primary outcome measure, the expected net benefits (i.e., benefits minus costs) of the requirements, amounted to an average of about $2.56 per hair dryer, over the hair dryer’s expected product life. Given sales of about 23 million handheld hair dryers annually, the present value of the expected net benefits associated with 1 year’s production would have amounted to about $58.9 million. A sensitivity analysis showed that the major findings were robust with respect to changes in the underlying parameters of the analysis. The study also discusses the factors leading to a high rate of effectiveness estimated for the immersion protection requirements.

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Notes

  1. For example, it is likely that society would spend well in excess of the VSL to prevent the death of an identified individual trapped in a mine or lost in the wilderness.

  2. In another example of benefits transfer, the Department of Transportation bases its VSL estimates entirely on nine labour market wage studies (Thomson 2015).

  3. Because of the high correlation between the GFCI_homes and the trend variables, and the problem of multicollinearity just mentioned, GFCI_homes was excluded from the model when we evaluated the impact of including a trend variable.

  4. Had the GFCI variable been excluded from the analysis because the coefficient was not statistically significant, the immersion protection requirements would have been estimated to have reduced the electrocution rate by 1.97e-7 deaths per handheld hair dryer per year.

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Authors and Affiliations

  1. Directorate for Economic Analysis, US Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD, 20814, USA

    Gregory B. Rodgers & Sarah E. Garland

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  1. Gregory B. Rodgers
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Correspondence to Gregory B. Rodgers.

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The views expressed in this article are those of the authors. The article has not been reviewed or approved by, and may not necessarily reflect, the views of the U.S. Consumer Product Safety Commission. Because this article was written in the authors’ official capacities, the article is in the public domain and may be copied freely.

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Rodgers, G.B., Garland, S.E. An Economic Analysis of Requirements to Prevent Handheld Hair Dryer Water Immersion Electrocutions in the USA. J Consum Policy 39, 223–240 (2016). https://doi.org/10.1007/s10603-016-9318-8

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