The evolution of cars - a thought...

[piterburg]

Lately cars are are becoming more and more reliable and long-lived. They also look more and more gorgeous. However, they become more alike in their looks, and are built in globalized fashion - with components and cars themselves coming from everywhere. For example, such high end car as Audi TT is built in Hungary, of all places

Comments

[vdinets]

Because the insurance system drives the prices up.

Speaking of cars, they are still much less reliable than trucks (big rigs routinely survive one million miles and more), not to mention airplanes (that are used almost non-stop for decades).

[piterburg]

Because the insurance system drives the prices up.

Yes. Once a third-party payor is in play, both the consumer and the provider of services have the incentive to drive costs up - at least in short term.

IMO, insurance is supposed to be just that - to provide for catastrophic events. It will not work for paying routine expenses in the long run, as it takes control away from where it rightly belongs.

However, I feel there are other causes as well. I feel I haven't thought this thru yet.

[yurvor]

Я думаю, это потому что лекарства - не commodity. Т.е. не предмет каждодневного (или хотя бы регулярного) употребления. Если человек покупает мелкую вещь раз в месяц, ему не придёт в голову экономить лишние 20 центов.

[piterburg]

Medical expenses ARE recurring expenses. And they are not "small". Medical insurance for family in Massachusetts costs over $1000 - more than car payments. So your explanation does not work.

[yurvor]

Не путай "медицинские расходы" и "медицинские товары". Товары каждый раз разные, и это - фишка.

[yurvor]

Да, кроме того, сравнивать со страховкой не корректно - страховку ты платишь "вообще", не за товар. Поэтому напрямую она на цену отдельного товара влияет слабо - конкуренция между товарами существенно слабее.

[opilipo]

because someone has to pay for all R&D and clinical studies of the released medicine, and those that failed

[piterburg]

Someone has to pay for R&D and design work for cars as well. It costs about a billion dollars on the average to develop a new vehicle. So there must be a different explanation.

[yurvor]

R&D and design work for cars гораздо больше используют предыдущий опыт.

[piterburg]

Still a billion dollars - not less than for a new patented drug or a medical device.

[isartorius]

excellent question.Of course, pharmaceutical companies will start their usual response/mantra 'bout the high cost of research etc,etc...
But I also have a similar question-why is that
that we pay (roughly ) the same amount fpr the average CD as we did 2o years ago,when CD's
came to a music market?
Doesn't make much sense to me except greed... :(
I'm not an economist so forgive my ignorance in economic and statistic field...

[piterburg]

"I also have a similar question-why is that that we pay (roughly ) the same amount fpr the average CD as we did 2o years ago,when CD's came to a music market?"

I think I can answer that. Music market is different, because competition is severely restricted by copyright laws. Of course, different musicians compete for listener' s dollars, but if you want to listen to Nirvana, you have to pay Nirvana's price.

[isartorius]

I s'pose it makes sense.I'mstillnot super happy about it,but I guess that'smy problem :)

[piterburg]

If you want to buy for less legally, you could use eBay.

But, thinking about it, I do not think that our copyright laws are quite right. There has to be a balance between protecting and rewarding creativity on one side and public interest in free exchange of creative works on the other.

So why then patents are valid for 20 years, while copyrights are valid for 120 years? That does not make sense to me. I would say 20 to 30 years (a span of one generation) would be just right.