Thought to have saved many lives, a Japanese early warning system sent a media alert seconds before the earthquake struck. The system took 12 years to implement and cost close to $500 million.
A similar warning system for the U.S. west coast is being developed. A multi second or minute warning may seem miniscule. However, it is long enough for speeding trains to decelerate, for elevators to reach the next floor, and for technology to go into a safe mode. Meanwhile, people can “duck, cover, and hold on.”
This takes us to a question. We know that California has been on the brink of what would be bankruptcy if a state could declare it. We know that the U.S. budget is undergoing vast cuts. Would you vote to continue work on the multi-million dollar California Integrated Seismic Network Shakealert system?
The Economic Lesson
The opportunity cost of a decision is the next best alternative. It is the sacrificed alternative. In other words, when you decide to do one thing, you will not do something else. Or…”Choosing is refusing.”
The opportunity cost of an early warning system could be more spending on Medicaid or Social Security or early childhood education. The opportunity cost could also be less spending.