The Significance of the "Peltzman Effect"

More important than regulating the protection of drivers once an accident has occurred is regulation to prevent the accidents themselves, especially accidents that impose substantial costs on others.

1. Require equipment that eliminates blind spots for trucks, busses, and cars in fleets.

2. Require automatic cruise control for trucks, busses, and cars in fleets. Drivers can override the default from the cruise control system, like always, but now fewer rear-end and lane-change collisions would occur. The systems would also get better with this requirement, and they would be put on more cars, as many drivers would be willing to pay for the extra convenience.

3. Require "black box" recorders on the same vehicles so that determinations of liability become trivial, and let these incentives do their work.

Consider each of these three for cars generally. I'm not sure which of these three, if any, are inexpensive enough to to pass a cost-benefit test to be put on all cars, but they've all clearly become inexpensive enough for vehicles that either are heavily used or create really big problems when an accident occurs.

Bruce Hall,

There is nothing more useless than a fact unilluminated by a theory.

The facts you mention don't nearly speak to to the issues raised in the blog post. You are just saying that seatbelts protect people from more serious injury in the event of a crash. No one is disputing that. Peltzman and Roberts are saying that because belts add a dimension of safety, people can push the envelope of danger in another dimension.

The question is whether or not State intervention is required for people to determine their relative optimums levels of safety/comfort/risk tolerance.

Of course I would question how the dollar figures were determined, and if the costs were born by the people involved in the crashes, those figures are accounted for in the riskyness of the driver's driving.

The costs of the accident (which increases with the reckelessness of the driver) x the probability of an accident (which increases with the recklessness of the driver) should be equal to or less than the benefit of driving in the manner chosen.

To the extent that the driver can have those costs borne by third party's, that driver will become more and more reckless.

My overall point is that facts cannont speak for themselves. Facts just sit out there, a theory is needed to really explain what is going on.

Just one other bit of information… from George Mason University.

http://www.stats.org/stories/distracted_drivers_may24_06.htm

Statistics are interesting because they can find "correlations" between data sets that reveal absolutely nothing about causation.

Are drivers more "reckless" *because* they have seatbelts available or are they just *distracted* because now they have cell phones or navigation systems or 150 satellite radio channels?

Are motorcyclists dying at a greater rate because car drivers have seatbelts or are there more accidents involving motorcyclists who are driving recklessly and failing to wear helmets while they try to race through high-density traffic situations?

Are pedestrian deaths from cars increasing because drivers have seatbelts and are more reckless or are pedestrians increasingly forced to walk on roads or cross intersections where traffic speeds are much higher… the norm for both in suburban areas which have grown rapidly?

To put the onus on seatbelts is a major stretch of statistical analysis without context.

The fact is seatbelt usage save lives (as do airbags) and serious injuries in much greater number than any theoretical increase in "reckless" driving that can be attributed to their use.

One more item to consider: in our litigious society, think about the field day lawyers would have if every manufacturer were left to its own devices to figure out which vehicle configurations were "lawyer-proof". Think billions of $$$ and no real overall safety improvements. At least regulations provide manufacturers with a baseline and some fallback for not implementing "future technology" today.

Russ,

I did not mean to say that Peltzman did not make a studied attempt, but there is overwhelming data (as well as individual testimonials) to show that seatbelts and airbags save large numbers of people (whether that number was 12,000 in 2001 or 9,571 matters little). I understand how studies extrapolate the data from samples, but the same indicators are present from nearly every examination of traffic deaths/injuries data.

The point is that seatbelt regulation did exactly what it was designed to do: save the lives of vehicle occupants. Whether recklessness is increasing (per mile driven?) is certainly difficult to measure, especially since the definition of "reckless" is so broad as it is enforced.

My points were that attempting to find "causation" between seatbelt usage and injuries to motorcyclists and pedestrians is very questionable. As to "correlaton", there are many significant correlations that have no material significance. It is a real stretch to argue that seatbelt regulations have only deflected the costs to motorcyclists and pedestrians, and, further, that supports the notion that government regulations are poor economics.

The real question might be: how many more deaths and injuries might be experienced without seatbelts and airbags and when will "the people" rise up and demand those as "standard equipment" on vehicles (there wasn't any such demand when the seatbelt regulations went into effect).

Just because "the market" or "the people" don't demand it, doesn't mean it isn't a sound economic and societal action.

I once noted (tongue in cheek…) that the safety sensors on elevator doors caused so much delay to passengers that eventually someone would die of old age before reaching their destination floor.

I therefore advocated the elimiation of such "safety" devices; once a few people fell victim to the powerful doors, the lesson would quickly spread and there would be no more such "accidents"!

Bruce,

You keep saying things like, "…there is overwhelming data (as well as individual testimonials) to show that seatbelts and airbags save large numbers of people (whether that number was 12,000 in 2001 or 9,571 matters little)."

That has nothing to do with the discussion. It would if seat belts meant that no one ever died in an accident. But if forcing people to wear seat belts increases the number of accidents because people drive less carefully, then it's possible that making people wear seat belts will increase the number of deaths. Yes, most people in an accident who wear a seat belt will live. But some will not. If the increase in accidents is sufficiently large, then the effect of seat belts could be to increase the number of traffic deaths. Let's ignore whether the magnitudes are realistic. Do you see the basic point?

It's the same as saying it's possible that an increase in price could lead to less revenue. Yes, if quantity stays the same, an increase in price means that price times quantity must go up. But you can't hold quantity constant. An increase in price will mean fewer sales. Whether revenue goes up or down becomes an empirical question.

Same principle with seat belts. Making people wear seat belts means in any one accident, you're safer. But if the number of accidents goes up because of the wearing of seat belts, then the effect on total number of lives lost (rather than the probability of being hurt in any one accident) is now uncertain. It's an empirical question. As I said before, you can dispute the empirical magnitudes. You don't want to argue that because wearing a seat belt reduces your likelihood of being hurt in an accident that Peltzman must be wrong. That's not the argument.

I saw a British study that wider lanes lead to more accidents for some of the same reasons as stated above – people felt they could drive faster, etc.

This discussion reminds me of a story I just read. An AP article blew my mind when they reported that obesity is killing people in Africa at ever increasing rates, and therefore something needed to be done. Not once did they mention that starving to death is becoming a thing of the past. I blogged "would you rather have 100 skinny kids dying at age 8, or 10 fat people dying at age 50?" To report that the death rates of one thing are rising, but to ignore the true death rates of all "food related illnesses" is just bad journalism.

Bruce,

I think some of the confusion comes from the term "reckless." When economists say that seat belts cause "reckless" driving, we simply mean that people are going to be less careful than they otherwise would be, not that they're going to be swerving all over the road. People are going to go a little faster and be a little less careful. That effect of safety devices has been shown by many many studies that Peltzman refers to in his podcast. Google "Peltzman effect" and you'll find them. Again, the magnitude is always an important question, but the phenomenon is real.

Russ,

Thanks for the clarification.

I called my oldest son who is a safety engineering consultant and he said the "relaxing of caution" effect is real, but tends to be temporary. A bicycle or motorcycle rider may try a more risky maneuver initially, but eventually the a more normalize behavior takes over. The effect may have been in play during the initial years of seatbelts, but with a couple of generations that have grown up with them, the effect is probably minimal.

There are a couple of basic presumptions in Dr. Peltzman's podcast:
1. the market will eventually embrace something good
2. regulation inevitably gets it wrong

In the area of automotive safety, the government works too fast and requires deployment of technology that is not quite ready for prime time. Just wait until people want the safety devices and they will create the market.

In the area of drug regulations, the government works too slowly and delays deployment of technology because it might not be ready for prime time. Let the drug companies get the drugs out and if some problems occur, correct them.

I'm wrestling with "having it both ways" or "having it neither way." In automotive safety, the low cost items (turn signals and external mirrors) were not a big sell to the public. A few dollars for the mirror and not much more for the signals. The benefits were obvious. Seat belts are less obvious. A good system costs quite a bit and while the well-off may have considered them, it is unlikely that the product and price would have generated much market demand nor led to the refinements there are today. Airbags, being completely invisible would still be on the research shelf.

Arguing that the FDA is too cautious and using AIDS drug testing as an example is a little disingenuous. Yes, that's the extreme and a little common sense would have helped a lot. But the danger with half-testing is some unnecessary deaths (which was the argument against "half-testing" automotive safety equipment.

Let's move to the area of air and water quality regulations. Too much, too little, not needed, the market would have demanding fixes when people in large numbers were getting ill?

Let's move to nuclear regulatory actions. Let the market decide what's safe?

Who is precient enough to determine the "perfect" balance? Or should we just trust the market to minimize the damage? What company is going to add 15% cost to the product for something that is invisible to the buyer… even if it benefits the buyer? Yes, some buyers will be sophisticated enough or funded enough to always buy the best. So the rest of the population should just be at risk until the market for an improvement "trickles down?"

Dr. Peltzman is persuasive, but there are counterpoints.

It seems to me that most accident avoidence revolves around minimizing damage to the car itself instead of worries about injury. My gut feeling (and I have nothing to back this up) is that dangerous driving is usually self regulating, i.e. it scares most people so they stop doing it. Avoiding fender benders, rear end collisions, etc. are much more about not hurting the car and incuring the expenses. One would think that the only people that really wouldn't care about this are the ones that can afford new cars, bodywork, lost work time, or higher insurance premiums. For everyone else, "reckless driving" should be minimized by financial incintives alone. I would think that this effect (you can call it the Crawford efect if you wish:-) would dwarf any incintives people have for driving more recklessly because they don't think they'll be killed and/or injured. I would also predict that there is a direct correlation between how new the car is (and therefore its value) and the frequency of accidents occuring. If Peltzman's theory is correct, it would mean that people think in a much different manner than I can imagine…

Isaac