Risk Homeostasis

A Theory about 

Risk Taking Behaviour

Common Misunderstandings

3 Risk Homeostasis and the "Peltzman effect"

 

A major package of legislative regulation concerning the “safe” design of new passenger vehicles to be sold in the USA came into effect in 1966. This included the obligatory installation of seatbelts for all vehicle seats, a steering column that would collapse in a crash instead of piercing the driver’s chest, penetration-resistant windshields, a dual braking system, and padded dashboards. The effect of these mandatory construction features upon subsequent accidents was studied by Sam Peltzman, an economist at the Universityof Chicago.[1]

 

When comparing the pre-regulation period 1947-1965 with the subsequent 1966-1972 period, in which there were more and more regulated vehicles in use, Peltzman came to the conclusion that the newly-legislated vehicle-manufacturing standards had not led to a reduction in the number of fatalities per km driven. While the legislation may have brought about a reduction in fatal accidents to car occupants per km of mobility, it did not reduce the total death rate so defined. It may, in fact, have led to an increase in the death rate of non-occupants, such as bicyclists and pedestrians, per motor-vehicle distance of mobility. A similar shift in risk from drivers to pedestrians has been reported in Australia.[2]

 

The Chicago study was published in 1975, and has mistakenly been viewed by several  authors as a cognate or even a precursor of risk homeostasis theory, and was attacked many times since by several other authors who maintained that the vehicle-manufacturing standards did have a reducing effect upon the traffic death rate per unit distance driven by motor vehicles. Still others who found evidence supporting the controversial findings.[3] In fact, in 1989, some 15 years later, the issue was still not settled.[4]

You may, however,  already have noticed, and justly so, that this debate is, at best, only marginally relevant to the question of the validity of risk homeostasis theory. This is because there is nothing in that theory that says that the accident rate per km driven cannot be reduced by technological interventions, regardless of whether they are mandated or not. The primary interest of risk homeostasis theory is the accident rate per hour of exposure to the roads and per head of population. As regards the post-regulatory years 1966-1972, one definitely cannot detect in the adjacent figure a lower per capita traffic death rate than in the preceding years 1947-1956. On the contrary, it was noticeably higher. See graph #1 below called "Annual variations in the unemployment rate and the traffic death rate per capita in theUSA, 1948-1987."


What you can see in this figure is that the increase in the traffic death rate per capita from 1961 to 1965 did not continue between 1966 and 1972. Was this due to the vehicle-manufacturing standards that came into effect in 1966? This would seem rather unlikely. Note that the period 1966-1972 falls within the 1960-1982 time frame that has shown a high correlation between the rate of employment and traffic fatalities. That correlation was very high and leaves little room for anything else that may have exerted an independent influence. The effect of the 1966 legislation on the per capita death rate in traffic, if it occurred at all, must have been quite marginal.


The next figure depicts the traffic death rate per unit of mobility driven, the death rate per capita, and the amount of mobility per head of population in the USA over a period of more than sixty years. As the number of deaths per 100 million miles of vehicle movement, shows a marked and more or less regular decline from 1923 to 1996. The total mileage per head of population, in thousands of miles per inhabitant, shows exactly the opposite: a marked and more or less regular increase. While the fatality rate per distance driven dropped by a factor of about 12, the distance driven divided by the number of USA residents, increased by about the same factor. That these data are not op-to-date is not the point. Their significance lies in showing that the fatality rate per km of driving in any given year is very different from the fatality rate per head of population in that that or any other given year.


The product of the data points on these two curves equals the numbers of deaths per 100,000 inhabitants, and this per capita death rate shows no persistent trend over time. In 1996 the per capita rate of death in traffic was about the as it had been in 1923. There are ups and downs in the per capita fatality rate and the causes of these have been attributed to the annual variations in the unemployment rate in the USA as well as in a variety of other countries.[5],[6] At this point we note that the ups and downs hovered around an average of about 23 deaths per 100,000 residents, but, more importantly, over a period of more than 70 years, no consistent long-term upward or downward trend can be detected. See Graph #2: "The traffic death rate per distance travelled, the traffic death rate per capita, and the road distance travelled per capita in the USA, 1923-1996."[7]



[1]Peltzman, S. (1975). The effects of automobile safety regulation. Journal of Political Economy, 83, 677-725.

[2]Conybeare, J.A.C. (1980). Evaluation of automobile safety regulations: The case of compulsive seatbelt legislation in Australia. Policy Sciences, 12, 27-39.

[3]Blomquist, G.C. (1988). The regulation of motor vehicle and traffic safety. Boston: Kluwer Academic Publishers.

[4]Zlatoper, T.J. (1989). Models explaining motor vehicle death rates in the United States. Accident Analysis and Prevention, 21, 125-154.

[5]Partyka, S.C. (1984). Simple models of fatality trends using employment and population data. Accident Analysis and Prevention, 16, 211-222.

[6]Wilde, G.J.S. (2001). Target Risk 2. Toronto: PDE Publications, Chapter 5.

[7]Graphed from data published by the National Safety Council (various years). Accident Facts.Chicago,Illinois.

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Graph #1: Annual variations in the unemployment rate and the traffic death rate per capita in theUSA, 1948-1987.

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Graph #2: The traffic death rate per distance travelled, the traffic death rate per capita, and the road distance travelled per capita in the USA, 1923-1996.