Saturday, September 5, 2015

What's the marginal incentive to commit murder in China?

In Taiwan, "hit to kill" or "double hit" cases have been common for decades.  For example,
A 2008 television report features security camera footage of a dusty white Passat reversing at high speed and smashing into a 64-year-old grandmother. The Passat’s back wheels bounce up over her head and body. The driver, Zhao Xiao Cheng, stops the car for a moment then hits the gas, causing his front wheels to roll over the woman. Then Zhao shifts into drive, wheels grinding the woman into the pavement. Zhao is not done. Twice more he shifts back and forth between drive and reverse, each time thudding over the grandmother’s body. He then speeds away from her corpse.

This phenomenon is caused by the incentives facing a driver:
In China the compensation for killing a victim in a traffic accident is relatively small—amounts typically range from $30,000 to $50,000—and once payment is made, the matter is over. By contrast, paying for lifetime care for a disabled survivor can run into the millions.

In other words, once you hit a pedestrian, the marginal benefit of killing the pedestrian is positive.

9 comments:

  1. Wouldn't condone such outrageous behavior, which is subsequently murder; trigger an abundance of vigilante retaliation by the deceased family? Would a lengthy vehicular homicide case cost the courts close to what it would cost to care for a critically injured patient? This seems like an incentive to keep morale low in Chinese communities, having the government enable people to be not guilty or even just liable for accidents that turn into death. In America that is what auto insurance is for? Is this different in China, are all drivers uninsured? If they are insured then why not enforce stricter traffic laws.

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    1. This is ridiculous, and I'm almost wondering if it's OK because of the population rate in China. With all the caps on having just one child per family and the fines for having big families, I wonder if this is a ploy to make things like this OK. One commenter below mentioned how this could very well happen in the US with people who have big pockets, untamed status or companies protecting their goods disregarding the cost of human life.

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  3. This is crazy and is certainly taking the marginal decision rule to an extreme. I am not surprised to hear of something like this outside of the USA, albeit this may be the actual worst example of an economic decision that I have ever heard. It brings to mind sweat shops and child labor, another example of taking basic economic decisions to an unethical level to reduce costs. The labor standards in developing countries presents factory owners the opportunity to offer their clients significantly lower costs, regardless of the working conditions and ethical concerns. They don’t always have to be as obvious or visible as we read about. For example there are reports that factory owners provide birth control and subject female employees to mandatory pregnancy screening in an effort to avoid the costs of replacing them. Even with social pressure from clients, the factory owners find a way to reduce costs in a shady manner. For example they contract to independent work from home contractors, so basically child labor comes back into the fold. It is amazing what people will come up with to reduce costs.
    JG

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  4. The incentive to commit murder in the context of a traffic accident exists because the law provides the driver with the option of buying his or her way out of criminal prosecution. By killing the pedestrian the driver faces the maximum personal loss of $50,000 and would not face any further prosecution since the law offers him the “protection” of being behind the wheel of a vehicle.
    Although events like this are common in China and Taiwan, it is common for multi-billion Dollar organizations in the U.S to act this way when it comes to the safety of their products and weighing the decision to recall their defective wares compared compensating customers for damages attributed to their products.

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    1. Amazing how society, not only overseas, puts prices on human life. Human life should trump any expenses any healthcare or insurance company would ensue. According to Froeb Ch. 2, two prominent hospitals rejected patients for organ transplants because the organs were donated and not bought.
      We expect people to act civilized and then are outraged when some commit lewd acts, yet as a society and a world, we enable this acts to happen because of weak monetary punishments as outlined in this blog. With insurance rates and healthcare costs as high as they are, it is scary to think that other nations would soon adopt this insane logic.

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  5. What is marginal benefit? According to business dictionary,” marginal benefit is an increase in an activity’s overall benefit that is caused by a unit increase in the level of that activity, all other factors remaining constant (www. businessdictionary.com).”

    Well this story as horrible and heartbreaking as it could possibly be, is an extreme example of marginal incentive. I tried to watch the video, however it would not load on my computer. Nevertheless, I did see a clip of it on the News. Just the thought of Zhao Cheng, driving over an elderly woman, going back in forth numbers times was just devastating.
    Nevertheless, I can understand why he increased his activity/efforts to kill her, in order to increase the benefit of paying less compensation. Based on China’s law “the compensation for killing a victim in a traffic accident is relatively small, in contrast to paying for a lifetime of care for a disabled survivor.” When I read stories like this, it just makes me realize how fortunate we are in America. We still have our own issues here, with gun control and etc. However could you imagine, being involved in an accident and the individual tries to kill you in order to reduce his insurance bill? That is just crazy.


    Reference:
    http://www.businessdictionary.com/definition/marginal-benefit.html

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  6. Of course I agree with the other commenters assessment of “That is crazy!”, but from the point of view of the driver, it does make sense. Even considering how litigation in the US works, when one considers the payout of a disabling injury that includes pain and suffering settlements, it’s easy to see how someone would be “better off dead” in the eyes of the person who has to pay for it. The marginal benefit in economic terms favors killing the person, even if it were an accident, in terms of dollars. What it does to the person who accidentally hit someone and was then faced with the decision to either make sure they were dead or face up to a potential lifetime of payments due to disability, is another matter entirely in a moral sense.

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