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Effects of Tort Liability and Insurance on Heavy Drinking and Drinking and Driving

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  • Sloan, Frank A
  • Reilly, Bridget A
  • Schenzler, Christoph

Abstract

Using self-reported data on patterns of alcohol use among individuals from the 1989-90 Behavioral Risk Factor Surveys, this study investigates effects of tort liability and third- and first-party insurance, alcohol prices, and criminal sanctions on frequency of binge drinking and driving under the influence of alcohol (DUI). Requiring drivers to purchase third-party insurance discouraged binge drinking, especially in states combining compulsory insurance with a surcharge for a DUI. Implementation of no-fault laws and switching from contributory to comparative negligence increased binge drinking, while higher alcohol prices reduced it. With one exception, neither tort nor contort deterrents affected the fraction of bingeing episodes after which the individual drove. Overall, it appears that deterrence of DUI is achieved by curbing behavior that leads to DUI, namely, binge drinking. Once individuals engage in binge drinking, it appears that many policies designed to be deterrents have little influence. Copyright 1995 by the University of Chicago.

Suggested Citation

  • Sloan, Frank A & Reilly, Bridget A & Schenzler, Christoph, 1995. "Effects of Tort Liability and Insurance on Heavy Drinking and Drinking and Driving," Journal of Law and Economics, University of Chicago Press, vol. 38(1), pages 49-77, April.
  • Handle: RePEc:ucp:jlawec:v:38:y:1995:i:1:p:49-77
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    File URL: http://dx.doi.org/10.1086/467325
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    References listed on IDEAS

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    1. Topel, Robert H, 1984. "Experience Rating of Unemployment Insurance and the Incidence of Unemployment," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 61-90, April.
    2. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-321, May.
    3. Landes, Elisabeth M, 1982. "Insurance, Liability, and Accidents: A Theoretical and Empirical Investigation of the Effect of No-Fault Accidents," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 49-65, April.
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    Cited by:

    1. Giacomo De Giorgi & Michele Pellizzari & William Gui Woolston, 2012. "Class Size And Class Heterogeneity," Journal of the European Economic Association, European Economic Association, vol. 10(4), pages 795-830, August.
    2. Ruhm, Christopher J. & Black, William E., 2002. "Does drinking really decrease in bad times?," Journal of Health Economics, Elsevier, vol. 21(4), pages 659-678, July.
    3. Ruhm, Christopher J., 1996. "Alcohol policies and highway vehicle fatalities," Journal of Health Economics, Elsevier, vol. 15(4), pages 435-454, August.
    4. Daniel P. Kessler & Daniel L. Rubinfeld, 2004. "Empirical Study of the Civil Justice System," NBER Working Papers 10825, National Bureau of Economic Research, Inc.
    5. Cook, Philip J. & Moore, Michael J., 2000. "Alcohol," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 30, pages 1629-1673 Elsevier.
    6. Don Freeman, 2009. "Beer in Good Times and Bad: A U.S. State-Level Analysis of Economic Conditions and Alcohol Consumption," Working Papers 0906, Sam Houston State University, Department of Economics and International Business.
    7. Christopher Carpenter, 2004. "Heavy alcohol use and youth suicide: Evidence from tougher drunk driving laws," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(4), pages 831-842.
    8. Nelson, Jon P., 2014. "Binge Drinking, Alcohol Prices, And Alcohol Taxes," Working Papers 164652, American Association of Wine Economists.
    9. Benson, Bruce L. & Rasmussen, David W. & Mast, Brent D., 1999. "Deterring drunk driving fatalities: an economics of crime perspective1," International Review of Law and Economics, Elsevier, vol. 19(2), pages 205-225, June.
    10. Michael Grossman & Sara Markowitz, 1999. "Alcohol Regulation and Violence on College Campuses," NBER Working Papers 7129, National Bureau of Economic Research, Inc.
    11. Dionne, Georges & Michaud, Pierre-Carl & Pinquet, Jean, 2013. "A review of recent theoretical and empirical analyses of asymmetric information in road safety and automobile insurance," Research in Transportation Economics, Elsevier, vol. 43(1), pages 85-97.
    12. Thomas S. Dee, 2001. "Alcohol abuse and economic conditions: Evidence from repeated cross-sections of individual-level data," Health Economics, John Wiley & Sons, Ltd., vol. 10(3), pages 257-270.
    13. Giuseppe Dari-Mattiacci & Gerrit De Geest, 2005. "The Filtering Effect of Sharing Rules," The Journal of Legal Studies, University of Chicago Press, vol. 34(1), pages 207-237, January.
    14. Christopher S. Carpenter & Carlos Dobkin & Casey Warman, 2016. "The Mechanisms of Alcohol Control," Journal of Human Resources, University of Wisconsin Press, vol. 51(2), pages 328-356.
    15. Carpenter, Christopher, 2004. "How do Zero Tolerance Drunk Driving Laws work?," Journal of Health Economics, Elsevier, vol. 23(1), pages 61-83, January.
    16. Bourgeon, Jean-Marc & Picard, Pierre, 2007. "Point-record driving licence and road safety: An economic approach," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 235-258, February.
    17. Resul Cesur & Inas Rashad Kelly, 2014. "Who Pays The Bar Tab? Beer Consumption And Economic Growth In The United States," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 477-494, January.
    18. Frank Sloan & Lindsey Eldred, 2015. "Do preferences of drinker-drivers differ?," International Journal of Health Economics and Management, Springer, vol. 15(2), pages 241-268, June.
    19. Vereeck, Lode & Vrolix, Klara, 2007. "The social willingness to comply with the law: The effect of social attitudes on traffic fatalities," International Review of Law and Economics, Elsevier, vol. 27(4), pages 385-408, December.
    20. Jean Pinquet & Georges Dionne & Charles Vanasse & Mathieu Maurice, 2007. "Point-record incentives, asymmetric information and dynamic data," Working Papers hal-00243056, HAL.
    21. Frank Sloan & Lindsey Eldred & Tong Guo & Yanzhi Xu, 2013. "Are people overoptimistic about the effects of heavy drinking?," Journal of Risk and Uncertainty, Springer, vol. 47(1), pages 93-127, August.
    22. Vukina, Tomislav & Nestić, Danijel, 2015. "Do people drive safer when accidents are more expensive: Testing for moral hazard in experience rating schemes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 71(C), pages 46-58.

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