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Evaluating Automobile Inspection Policy Using Auto Insurance Data

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  • KUNIYOSHI SAITO

Abstract

This paper examines the effect of mandatory periodic safety inspections on traffic accident rates. Using a data set of more than 15,000 auto insurance policyholders in Japan, we investigate the relationship between car age and accident rates and find little evidence that accident rates decline due to safety inspections, specifically in the inspection year. The result holds, even if we take the heterogeneity across drivers into account, and is robust to various parametric and nonparametric procedures. We conjecture that our results are obtained (a) because most motor vehicle accidents are not caused by mechanical failures and (b) because government regulations impose too strict and frequent inspections on car owners in Japan. (JEL C14, K32, L51, L98, R41)

Suggested Citation

  • Kuniyoshi Saito, 2009. "Evaluating Automobile Inspection Policy Using Auto Insurance Data," Contemporary Economic Policy, Western Economic Association International, vol. 27(2), pages 200-215, April.
    • Handle: RePEc:bla:coecpo:v:27:y:2009:i:2:p:200-215
    DOI: 10.1111/j.1465-7287.2008.00108.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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