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An Empirical Test of the Offset Hypothesis

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  • Sen, Anindya

Abstract

I exploit cross-province and time-series variation in Canadian mandatory seat belt legislation to empirically test the offset hypothesis. The results of this study offer modest evidence of the existence of offsetting behavior by drivers. Specifically, increased use of seat belts by drivers after the enactment of seat belt legislation should have led to a 29 percent decrease in driver fatalities. However, econometric estimates indicate that the introduction of seat belt legislation is significantly correlated with only a 21 percent decline in driver fatalities. Furthermore, the use of legislative and nonlegislative factors to control for the effects of independent determinants of traffic fatalities is critical, as the omission of these effects implies that seat belt laws are associated with roughly a 32 percent decrease in driver deaths, thus implying an absence of significant offsetting behavior. Copyright 2001 by the University of Chicago.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Law & Economics.

Volume (Year): 44 (2001)
Issue (Month): 2 (October)
Pages: 481-510

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Handle: RePEc:ucp:jlawec:v:44:y:2001:i:2:p:481-510

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Web page: http://www.journals.uchicago.edu/JLE/

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Cited by:
  1. Maheshri, Vikram & Mannering, Fred & Winston, Clifford, 2006. "An Exploration of the Offset Hypothesis Using Disaggregate Data:The Case of Airbags and Antilock Brakes," Working paper 155, Regulation2point0.
  2. Dee, Thomas S. & Sela, Rebecca J., 2003. "The fatality effects of highway speed limits by gender and age," Economics Letters, Elsevier, vol. 79(3), pages 401-408, June.
  3. Liqun Liu, 2008. "Spillover of cause-specific longevity interventions: an independent mortality risk model," The European Journal of Health Economics, Springer, vol. 9(2), pages 193-201, May.
  4. Pavel A. Yakovlev & Margaret Inden, 2010. "Mind the Weather: A Panel Data Analysis of Time-Invariant Factors and Traffic Fatalities," Economics Bulletin, AccessEcon, vol. 30(4), pages 2685-2696.
  5. Kopits, Elizabeth & Cropper, Maureen, 2005. "Why have traffic fatalities declined in industrialized countries ? Implications for pedestrians and vehicle occupants," Policy Research Working Paper Series 3678, The World Bank.
  6. Antonio Nicita & Simona Benedettini, 2012. "The Costs of Avoiding Accidents.Selective Compliance and the 'Peltzman Effect' in Italy," Department of Economics University of Siena 631, Department of Economics, University of Siena.
  7. Liu, Liqun & Neilson, William S., 2006. "Endogenous private safety investment and the willingness to pay for mortality risk reductions," European Economic Review, Elsevier, vol. 50(8), pages 2063-2074, November.
  8. Benedettini, Simona & Nicita, Antonio, 2012. "The costs of avoiding accidents: Selective compliance and the ‘Peltzman effect’ in Italy," International Review of Law and Economics, Elsevier, vol. 32(2), pages 256-270.
  9. Thomas Traynor, 2003. "The impact of safety regulations on externalities," Atlantic Economic Journal, International Atlantic Economic Society, vol. 31(1), pages 62-70, March.

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