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An Empirical Test of the Offset Hypothesis

Listed author(s):
  • Sen, Anindya

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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File URL: http://dx.doi.org/10.1086/322051
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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
Contact details of provider: Web page: http://www.journals.uchicago.edu/JLE/

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  1. Wesley A. Magat & Michael J. Moore, 1996. "Consumer Product Safety Regulation in the United States and the United Kingdom: The Case of Bicycles," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 148-164, Spring.
  2. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
  3. Crandall, Robert W & Graham, John D, 1984. "Automobile Safety Regulation and Offsetting Behavior: Some New Empirical Estimates," American Economic Review, American Economic Association, vol. 74(2), pages 328-331, May.
  4. Evans, William N & Graham, John D, 1991. "Risk Reduction or Risk Compensation? The Case of Mandatory Safety-Belt Use Laws," Journal of Risk and Uncertainty, Springer, vol. 4(1), pages 61-73, January.
  5. 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 251-264, October.
  6. Fowles, Richard & Loeb, Peter D, 1989. "Speeding, Coordination, and the 55-MPH Limit: Comment," American Economic Review, American Economic Association, vol. 79(4), pages 916-921, September.
  7. Lindgren, Bjorn & Stuart, Charles, 1980. "The Effects of Traffic Safety Regulation in Sweden," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 412-427, April.
  8. Garbacz, Christopher, 1990. "Estimating seat belt effectiveness with seat belt usage data from the Centers for Disease Control," Economics Letters, Elsevier, vol. 34(1), pages 83-88, September.
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