A critical analysis of Peltzman's "The effects of automobile safety regulation"

Abstract
Conflicting results have emerged from studies of the effect of governmental regulations on motor vehicle related deaths. A number of researchers have found that seat belts—first required by state laws—and designs chosen by manufacturers to meet Federal Motor Vehicle Safety Standards substantially reduced deaths to vehicle occupants in crashes. However, Sam Peltzman has concluded that the effect of regulation on occupant fatalities are offset by increased nonoccupant deaths. He bases his analysis on trends in published fatality data in relation to economic and other variables. He hypothesizes that drivers have a “demand for risk” that is a function of “driving intensity,” which is affected by a desire to increase earnings and by anticipated cost of crash involvement. According to Peltzman, drivers respond to increased occupant crash protection by increased “risky driving” to have more time to increase earnings, thus increasing the overall crash rate and injury to pedestrians, motorcyclists, and bicyclists.The assumptions, model, and data set forth by Pelztman will be examined here, and his conclusions will be found unwarranted. Data which he does not consider support the conclusion that motor vehicle safety standards are effective in reducing fatalities and that his theory of driver behavior is not supported empirically.