Why are the net benefits of a LoJack installation in a car considered to be positive for the society as a whole?

Answer 1

From the community's standpoint the net benefits are positive. Ian Ayres of Yale Law School and economist Steven Levitt of the University of Chicago ran the numbers and concluded that equipping three additional cars with LoJacks (which last for the life of a car) will deter one auto theft a year in a city, most likely of an unequipped car. They found that annualized installation and service charges on a LoJack averaged about $97 per year, and the loss per stolen car (averaged over those recovered and not recovered) is approximately $4,000 . All of the cars in a city share the benefits of an additional LoJack, and those benefits are more than ten times the cost of installing and maintaining it.