The Peltzman Effect

by on July 6, 2010 at 7:16 am in Economics | Permalink

The NHTSA had volunteers drive a test track in cars with automatic lane departure correction, and then interviewed the drivers for their impressions. Although the report does not describe the undoubted look of horror on the examiner’s face while interviewing one female, 20-something subject, it does relay the gist of her comments.

After she praised the ability of the car to self-correct when she drifted from her lane, she noted that she would love to have this feature in her own car. Then, after a night of drinking in the city, she would not have to sleep at a friend’s house before returning to her rural home.

From CSV.  The Peltzman effect doesn’t mean that improvements in safety are always negated but it does remind us that we can never ignore the human response.

k July 6, 2010 at 8:04 am

good intentions –> hell

Andrew July 6, 2010 at 8:34 am

A co-worker once asserted that the beginning of the end of civilization was the machine hand guard.

Pierre-Louis July 6, 2010 at 11:24 am

How is the Peltzman Effect different from moral hazard?

mulp July 6, 2010 at 11:32 am

I prefer the roads with technology that not only prevents straying from my lane, and also ensures that I can travel while drunk or asleep. And Abraham Lincoln signed the bill funding this transportation technology all the way from the East Coast to California.

Rahul July 6, 2010 at 12:16 pm

>>>Motorcyclists often call drivers “cagers” because of the feeling of invulnerability that the car’s shell provides them, making them dangerous.It would be an improvement if every car driver were required to learn how to ride a motorcycle. It would make them much more attentive drivers.<<<

By extension wouldn’t you expect bicyclists to be the best and most attentive drivers then?

el July 6, 2010 at 1:04 pm

>>>>>Motorcyclists often call drivers “cagers” because of the feeling of invulnerability that the car’s shell provides them, making them dangerous.It would be an improvement if every car driver were required to learn how to ride a motorcycle. It would make them much more attentive drivers.< <<

>>By extension wouldn’t you expect bicyclists to be the best and most attentive drivers then?

I just started bicycling in NYC, and I would say I’m a very cautious bicyclist and driver, but this most definitely does not equate to “best and most attentive”.

Also, I find those who self-identify as “good” in the sense of skilled are often the ones who knowingly take the most risks. The wannabe Lance Armstrong is the one who’s probably going to die weaving through traffic; I’m the one more likely to die from sheer idiocy and inexperience.

Pedro July 6, 2010 at 1:46 pm

The Peltzman Effect is nearly always smaller than the main effect of the safety regulation or device. Seat belts, child seats, airbags, stability control, drunk driving laws, etc. all do make people safer, just not as safe as if their behavior had remained the same as it was before the change. So it will be with automatic lane departure correction and automatic crash avoidance braking.

Bill July 6, 2010 at 2:56 pm

The real answer for the young lady’s dilemma–drive or do an unwanted sleepover at her boyfriend–would have been to feign barfing and vommit on him, so as to avoid close encounters of the unwanted kind later in the evening while still being able to sleepover. That would teach him not to ply her with alcohol.

Clearly, the economists on this forum furthermore did not explore the game theoretic aspects of this behaviour. Look at the young man’s incentives: he had an incentive to buy a lot of drinks to induce the sleepover. The target had the incentive to incentive to drink less, but, then the behaviouralist would say, there came a tipping point in the evening where the target became less rational and consumed more alcohol. The way to end the game is to take away the young man’s incentives to inebriate others.

Finally, if one carries the game theoretic modeling further to the car which detects, and corrects for swerving–they have it all wrong. The car, when it detects swerving, should flash lights, and blare the horn so that others and the road could avoid the driver. This would also increase the likelihood of the driver’s arrest, since flashing lights and a blaring horn would attract police attention. And, if the driver persisted in driving–with the horn blaring and the lights flashing and people swerving to get out of the way–and then the driver ran into something—well, we just solved the Peltzman problem. One injury; no one else; incentives aligned. Game over. Peltzman problem solved.

Ryan Vann July 6, 2010 at 3:29 pm

“I believe moral hazard characterizes a principal-agent relationship; where there is some amount of asymmetry of information.”

Seems this definition adds complexity unnecessarily. Moral hazard generally requires a principal agent relationship, but not information asymmetry. The very existence of a principal-agent relationship can create moral hazard; for example, if I am insured for the full amount of my vehicles’ loan balance (I went ahead and got gap,) I might be more inclined to drive less carefully.

TallDave July 6, 2010 at 4:41 pm

Human error causes the overwhleming majority of accidents. I’ll bet within 50 years less than half of people have active drivers’ licenses, only ten percent drive regularly, and everyone hates them because they still cause most of the accidents.

DP Roberts July 6, 2010 at 5:31 pm

@Rahul

Your point seems to follow from what I said, but you missed part of it.

I also said I have observed reckless motorcyclists and bicyclists. Some cyclists become overconfident with experience. Others choose to cycle for the ability to be more reckless.

My suggestion was that having ALL drivers take a course in motorcycling would make the driving population more aware of the dangers ON AVERAGE. There will still exist reckless cyclists and drivers. It will break the “cager” mentality of the average driver.

I don’t think I made my position clear on Peltzman Effect. I believe safety devices do reduce fatalities. I don’t really think the presence of an airbag makes anyone more dangerous – it was just a joke. I do think that giving pedestrians and bikes the greater legal property right to shared public goods is dangerous. The vulnerable should act as if they are vulnerable. Trying to protect “the little guy” is counterproductive.

Law enforcement should reduce unsafe acts by motor vehicle operators. I can stand on any street corner in any city for ten minutes and observe at least five reckless drivers worthy of a $500 ticket and points.

voiceofmoderation July 6, 2010 at 7:16 pm

As a former NHTSA automotive regulator, I can assure you that the agency is well aware of the human costs of new automotive equipment. When we wrote the new fuel economy rules last year, we extensively analyzed the “rebound effect,” which is the increased driving behavior people engage in when they get a car with better mileage. It’s about 15%, according to our estimates, which gets stripped away from any benefits better fuel economy may offer. If lane-avoidance technology works well enough to let drunk people drive home, they’ll factor that into the equation. Although the technology I’ve seen is nowhere near that good… yet.

Colonel Panic July 6, 2010 at 10:20 pm

> I also think bicyclists who ride on city streets should be licensed and insured. Every day I witness bicyclists ignoring traffic laws with impunity, endangering themselves, pedestrians, and the driving records of unfortunate drivers who don’t see them trying to pass on the right.

You’ve just identified my two biggest beefs with bicyclists: First, the way most switch to and from “pedestrian mode” as it suits them (e.g. Blazing through a red light because the crosswalk is green). The second is when they ride with no regard for powered vehicular traffic on roads where they clearly cannot observe the minimum speed limit. In most of the greater Phoenix metro area, it’s legal to drive golf carts on the road, but you have to keep them on streets where the speed limit is 35 or below. The asshat, er, Armstrong-wannabe should keep that in mind as he lazily rides @ 25 mph down a street with a posted limit of 45.

> Law enforcement should reduce unsafe acts by motor vehicle operators. I can stand on any street corner in any city for ten minutes and observe at least five reckless drivers worthy of a $500 ticket and points.

I’d be happy if they stationed someone at intersections to ticket the jerks who enter the intersection when there’s nowhere for them to go and then screw it up for the perpendicular lanes.

asos discount code July 7, 2010 at 1:17 am

The Peltzman effect is like someone who apply beyond his/her means even after getting a raise. The best explanation is centering on prophylactic when driving –regardless of what new safeties are put into place.

Dan Weber July 7, 2010 at 12:42 pm

If we can get more done at the same risk level, isn’t that good?

Dan Weber July 7, 2010 at 12:55 pm

Rubika’s comment was some interesting blogspam.

Alfred July 7, 2010 at 11:14 pm

Like your article, hope you like what.
http://joe060701.typepad.com/

John Thacker July 8, 2010 at 12:18 pm

The Peltzman Effect is nearly always smaller than the main effect of the safety regulation or device.

Well, yes. The objection comes in when there are negative externalities. In that case, the Peltzman Effect can result in the more risk-tolerant individuals making things more risky for those with low risk tolerance. For example, many safety devices can make a car much safer for the occupants, but not for cyclists or pedestrians hit by the car. With the safety devices, the cars drive faster, making things more dangerous for cyclists or pedestrians than without the devices.

By the same token, people who would always wear safety belts anyway can be worse off when safety belts are made mandatory, because the people who otherwise wouldn’t wear them drive slightly more aggressively and cause more accidents that then involve the safety belt-anyway people.

To be sure, in the vast majority of cases there’s net safety improvements, but in general the safety improvements accrue to the risk tolerant (who might otherwise prefer being riskier, though you can call them irrational) and the negative effects accrue to the responsible people. It’s understandable why that might bother people.

wholesale clubwear July 12, 2010 at 8:24 pm

Everything is very open and very clear explanation of issues. was truly information. Your website is very useful. Thanks for sharing.

hollister uk July 28, 2010 at 3:32 am

dazzling and outstanding; every girl will be happier

Dallas Video Services July 28, 2010 at 5:46 am

Peltzman’s study is the type of econometric voodoo that makes people distrust “experts.” The best explanation is centering on prophylactic when driving –regardless of what new safeties are put into place.

mbt shoes August 5, 2010 at 4:21 am

By the same token, people who would always wear safety belts anyway can be worse off when safety belts are made mandatory, because the people who otherwise wouldn’t wear them drive slightly more aggressively and cause more accidents that then involve the safety belt-anyway people.

air max September 15, 2010 at 9:22 pm

Hey friend, if i say i buy one cheap air max, air max 90, nfl jerseys authentic fron the website only $41.11,do you want to believe?

it is really a good website, they say all their products are authentic, i like the products ghd purple,

and christian louboutin, at first i dont believe that, just have a try,

and now, when i receive the products i am so happy, for their good quality and best service.

i take my air max 95 and nike shox just only 3 days for shipping. and it is really a nice style.

thanks so much.

New Liverpool Shirts October 11, 2010 at 9:41 pm

We all have defense instincts and this is more distinctive in mothers I believe. Sometimes it’s just having common sense to know that not all happenings and human characteristics has to be explained scientifically.

Titanium Jewellery December 31, 2010 at 1:31 am

The objection comes in when there are negative externalities. In that case, the Peltzman Effect can result in the more risk-tolerant individuals making things more risky for those with low risk tolerance. For example, many safety devices can make a car much safer for the occupants, but not for cyclists or pedestrians hit by the car. Titanium Jewelry
Titanium NecklacesWith the safety devices, the cars drive faster, making things more dangerous for cyclists or pedestrians than without the devices.

chevrolet turbocharger February 1, 2011 at 1:20 am

Yes, and if you do not trust your spelling and the browser’s checker, write the comment in your word processor and transfer by copy/paste. Or, where the blog author enables DISQUS, use that, you can later fix errors with its edit feature. But careful, you may catch it if if you alter meaning of your comment after people built a dialog on it.

Comments on this entry are closed.

Previous post:

Next post: