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Impact of Pay-at-the-Pump on Safety Through Enhanced Vehicle Fuel Efficiency

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  • J. Daniel Khazzoom

Abstract

Pay-at-the-Pump (PATP) is a proposal for replacing the lump-sum payment of auto insurance by a system of surcharge on gasoline price. This study examines the main argument made against PATP-namely, that by stimulating the demand for fuel-efficient vehicles, PATP results in a drastic deterioration in highway safety. The study finds the evidence does not support this argument. Moreover, if as critics argue, PATP does indeed result in a substantially accelerated replacement of older vehicles with more fuel-efficient ones, the introduction of PATP may be expected to result in a substantially safer fleet of vehicles, as well.

Suggested Citation

  • J. Daniel Khazzoom, 1997. "Impact of Pay-at-the-Pump on Safety Through Enhanced Vehicle Fuel Efficiency," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 103-133.
  • Handle: RePEc:aen:journl:1997v18-03-a05
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    References listed on IDEAS

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    Cited by:

    1. Parry, Ian W. H., 2004. "Comparing alternative policies to reduce traffic accidents," Journal of Urban Economics, Elsevier, vol. 56(2), pages 346-368, September.
    2. Kavalec, Chris & Woods, James, 1999. "Toward marginal cost pricing of accident risk: the energy, travel, and welfare impacts of pay-at-the-pump auto insurance," Energy Policy, Elsevier, vol. 27(6), pages 331-342, June.
    3. Vedenov, Dmitry & Wetzstein, Michael, 2008. "Toward an optimal U.S. ethanol fuel subsidy," Energy Economics, Elsevier, vol. 30(5), pages 2073-2090, September.
    4. Ian W. H. Parry & Margaret Walls & Winston Harrington, 2007. "Automobile Externalities and Policies," Journal of Economic Literature, American Economic Association, vol. 45(2), pages 373-399, June.
    5. Khazzoom, J. Daniel, 1999. "Pay-at-the-Pump Auto Insurance," Discussion Papers dp-98-13-rev, Resources For the Future.
    6. Parry, Ian & Fischer, Carolyn & Harrington, Winston, 2004. "Should Corporate Average Fuel Economy (CAFE) Standards Be Tightened?," Discussion Papers dp-04-53, Resources For the Future.
    7. Khazzoom, J. Daniel, 1999. "Pay-at-the-Pump (PATP) Auto Insurance: Criticisms and Proposed Modifications," Discussion Papers dp-99-14-rev, Resources For the Future.

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    JEL classification:

    • F0 - International Economics - - General

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