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An Exploration of the Offset Hypothesis Using Disaggregate Data:The Case of Airbags and Antilock Brakes

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  • Maheshri, Vikram
  • Mannering, Fred
  • Winston, Clifford

Abstract

The offset hypothesis predicts consumers adapt to innovations that improve safety by becoming less vigilant about safety. Previous tests have used aggregate data that may confound the effect of a safety policy with those consumers who are most affected by it. We test the hypothesis using disaggregate data to analyze the effects of airbags and antilock brakes on automobile safety. We find that safety-conscious drivers are more likely than other drivers to acquire airbags and antilock brakes but these safety devices do not have a significant effect on collisions or injuries, suggesting drivers trade off enhanced safety for speedier trips.

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Bibliographic Info

Paper provided by Regulation2point0 in its series Working paper with number 155.

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Date of creation: Apr 2006
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Handle: RePEc:reg:wpaper:155

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  1. Vassilis A. Hajivassiliou & Axel Borsch-Supan, 1990. "Smooth Unbiased Multivariate Probability Simulators for Maximum Likelihood Estimation of Limited Dependent Variable Models," Cowles Foundation Discussion Papers 960, Cowles Foundation for Research in Economics, Yale University.
  2. Robert S. Chirinko & Edward P. Harper, 1993. "Buckle up or slow down? New estimates of offsetting behavior and their implications for automobile safety regulation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(2), pages 270-296.
  3. Mannering, Fred & Winston, Clifford, 1995. "Automobile Air Bags in the 1990s: Market Failure or Market Efficiency?," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 265-79, October.
  4. David W. Harless & George E. Hoffer, 2003. "Testing for Offsetting Behavior and Adverse Recruitment Among Drivers of Airbag-Equipped Vehicles," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(4), pages 629-650.
  5. Lindsay Noble Calkins & Thomas J. Zlatoper, 2001. "The Effects of Mandatory Seat Belt Laws on Motor Vehicle Fatalities in the United States," Social Science Quarterly, Southwestern Social Science Association, vol. 82(4), pages 716-732.
  6. Steven D. Levitt & Jack Porter, 2001. "Sample Selection In The Estimation Of Air Bag And Seat Belt Effectiveness," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 603-615, November.
  7. Traynor, Thomas L, 1993. " The Peltzman Hypothesis Revisited: An Isolated Evaluation of Offsetting Driver Behavior," Journal of Risk and Uncertainty, Springer, vol. 7(2), pages 237-47, October.
  8. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
  9. Sen, Anindya, 2001. "An Empirical Test of the Offset Hypothesis," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 481-510, October.
  10. John M. Yun, 2002. "Offsetting Behavior Effects of the Corporate Average Fuel Economy Standards," Economic Inquiry, Western Economic Association International, vol. 40(2), pages 260-270, April.
  11. Alma Cohen & Liran Einav, 2003. "The Effects of Mandatory Seat Belt Laws on Driving Behavior and Traffic Fatalities," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 828-843, November.
  12. Peterson, Steven & Hoffer, George & Millner, Edward, 1995. "Are Drivers of Air-Bag-Equipped Cars More Aggressive? A Test of the Offsetting Behavior Hypothesis," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 251-64, October.
  13. McCarthy, Patrick S., 1999. "Public policy and highway safety: a city-wide perspective," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 231-244, March.
  14. Hausman, J. A. & Abrevaya, Jason & Scott-Morton, F. M., 1998. "Misclassification of the dependent variable in a discrete-response setting," Journal of Econometrics, Elsevier, vol. 87(2), pages 239-269, September.
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Cited by:
  1. Nicholas Wilson & Wentao Xiong & Christine Mattson, 2011. "Is Sex Like Driving? Risk Compensation Associated with Male Circumcision in Kisumu, Kenya," Department of Economics Working Papers 2011-16, Department of Economics, Williams College, revised Jan 2012.
  2. Green, Kesten C. & Armstrong, J. Scott, 2012. "Evidence on the effects of mandatory disclaimers in advertising," MPRA Paper 37766, University Library of Munich, Germany.
  3. Till Grüne-Yanoff & Holger Rosencrantz, 2011. "Beneficial safety decreases," Theory and Decision, Springer, vol. 70(2), pages 195-213, February.
  4. Nicholas Wilson & Wentao Xiong & Christine Mattson, 2011. "Is Sex Like Driving? Risk Compensation Associated with Randomized Male Circumcision in Kisumu, Kenya," Center for Development Economics 2011-09, Department of Economics, Williams College, revised Jan 2012.

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