IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v31y2003i1p62-70.html
   My bibliography  Save this article

The impact of safety regulations on externalities

Author

Listed:
  • Thomas Traynor

Abstract

Empirical analyses of product safety regulations have indicated that such regulations induce compensating behavior (also known as offsetting behavior) by the users of products that pose risks to their health. Many of these analyses conclude that such compensating behavior causes externalities to rise. In such cases, regulations reduce the loss suffered by the user of the good when a harmful event occurs, encouraging a moral hazard response which creates externalities for others. Other studies find that although compensating behavior mitigates the beneficial impact of safety regulations, such externalities do not rise. This paper presents a model suggesting that although compensating behavior always occurs in response to product safety regulations, a dichotomy exists wherein regulations engineered to reduce the typical loss suffered by individuals per accident (or loss event) will increase externalities, while regulations engineered to reduce the number of accidents (or loss events) will reduce externalities. Copyright International Atlantic Economic Society 2003

Suggested Citation

  • Thomas Traynor, 2003. "The impact of safety regulations on externalities," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 31(1), pages 62-70, March.
    • Handle: RePEc:kap:atlecj:v:31:y:2003:i:1:p:62-70
    DOI: 10.1007/BF02298463
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF02298463
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF02298463?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Risa, Alf Erling, 1992. "Public Regulation of Private Accident Risk: The Moral Hazard of Technological Improvements," Journal of Regulatory Economics, Springer, vol. 4(4), pages 335-346, December.
    2. Singh, Harinder & Thayer, Mark, 1992. "Impact of Seat Belt Use on Driving Behavior," Economic Inquiry, Western Economic Association International, vol. 30(4), pages 649-658, October.
    3. Sen, Anindya, 2001. "An Empirical Test of the Offset Hypothesis," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 481-510, October.
    4. Viscusi, W Kip, 1984. "The Lulling Effect: The Impact of Child-Resistant Packaging on Aspirin and Analgesic Ingestions," American Economic Review, American Economic Association, vol. 74(2), pages 324-327, May.
    5. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
    6. Avery, Christopher & Heymann, S Jody & Zeckhauser, Richard, 1995. "Risks to Selves, Risks to Others," American Economic Review, American Economic Association, vol. 85(2), pages 61-66, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Spash, Clive L., 2009. "The Brave New World of Carbon Trading," MPRA Paper 19114, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Clifford Winston & Vikram Maheshri & Fred Mannering, 2006. "An exploration of the offset hypothesis using disaggregate data: The case of airbags and antilock brakes," Journal of Risk and Uncertainty, Springer, vol. 32(2), pages 83-99, March.
    2. Shanike J. Smart & Solomon W. Polachek, 2024. "COVID-19 vaccine and risk-taking," Journal of Risk and Uncertainty, Springer, vol. 68(1), pages 25-49, February.
    3. Pål Andreas Pedersen, 2001. "A Game Theoretical Approach to Road Safety," Studies in Economics 0105, School of Economics, University of Kent.
    4. Hoy, Michael & Polborn, Mattias K., 2015. "The value of technology improvements in games with externalities: A fresh look at offsetting behavior," Journal of Public Economics, Elsevier, vol. 131(C), pages 12-20.
    5. repec:ags:aaea22:335618 is not listed on IDEAS
    6. Asmussen, Katherine E. & Mondal, Aupal & Bhat, Chandra R., 2022. "Adoption of partially automated vehicle technology features and impacts on vehicle miles of travel (VMT)," Transportation Research Part A: Policy and Practice, Elsevier, vol. 158(C), pages 156-179.
    7. Ludwig, Jens & Marcotte, Dave E. & Norberg, Karen, 2009. "Anti-depressants and suicide," Journal of Health Economics, Elsevier, vol. 28(3), pages 659-676, May.
    8. Antonio Nicita & Simona Benedettini, 2012. "The Costs of Avoiding Accidents.Selective Compliance and the 'Peltzman Effect' in Italy," Department of Economics University of Siena 631, Department of Economics, University of Siena.
    9. McCannon, Bryan C., 2009. "Do less-violent technologies result in less violence? A theoretical investigation applied to the use of tasers by law enforcement," Economics Discussion Papers 2009-36, Kiel Institute for the World Economy (IfW Kiel).
    10. Wing, Coady & Marier, Allison, 2014. "Effects of occupational regulations on the cost of dental services: Evidence from dental insurance claims," Journal of Health Economics, Elsevier, vol. 34(C), pages 131-143.
    11. John R. Boyce & Diane P. Bischak, 2010. "Learning by Doing, Knowledge Spillovers, and Technological and Organizational Change in High-Altitude Mountaineering," Journal of Sports Economics, , vol. 11(5), pages 496-532, October.
    12. François Salanié & Nicolas Treich, 2020. "Public and private incentives for self-protection," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 45(2), pages 104-113, September.
    13. Anthony Ogus, 1998. "Regulatory Appraisal: A Neglected Opportunity for Law and Economics," European Journal of Law and Economics, Springer, vol. 6(1), pages 53-68, July.
    14. Elizabeth Kopits & Maureen Cropper, 2008. "Why Have Traffic Fatalities Declined in Industrialised Countries?: Implications for Pedestrians and Vehicle Occupants," Journal of Transport Economics and Policy, University of Bath, vol. 42(1), pages 129-154, January.
    15. Berlemann, Michael & Matthes, Andreas, 2014. "Positive externalities from active car safety systems," Journal of Policy Modeling, Elsevier, vol. 36(2), pages 313-329.
    16. repec:ipf:psejou:v:42:y:2018:i:42:p:45-65 is not listed on IDEAS
    17. Anderson, D. Mark & Sandholt, Sina, 2016. "Booster Seats and Traffic Fatalities among Children," IZA Discussion Papers 10071, Institute of Labor Economics (IZA).
    18. Bae, Yong-Kyun, 2011. "Primary Seat Belt Laws and Offsetting Behavior: Empirical Evidence from Individual Accident Data," MPRA Paper 30443, University Library of Munich, Germany.
    19. Jonathan Klick & Thomas Stratmann, 2007. "Diabetes Treatments and Moral Hazard," Journal of Law and Economics, University of Chicago Press, vol. 50(3), pages 519-538.
    20. Pavel A. Yakovlev & Margaret Inden, 2010. "Mind the Weather: A Panel Data Analysis of Time-Invariant Factors and Traffic Fatalities," Economics Bulletin, AccessEcon, vol. 30(4), pages 2685-2696.
    21. Brozovic, Nicholas & Ando, Amy Whritenour, 2009. "Defensive purchasing, the safety (dis)advantage of light trucks, and motor-vehicle policy effectiveness," Transportation Research Part B: Methodological, Elsevier, vol. 43(5), pages 477-493, June.
    22. D. Mark Anderson & Sina Sandholt, 2019. "Are Booster Seats More Effective than Child Safety Seats or Seat Belts at Reducing Traffic Fatalities among Children?," American Journal of Health Economics, MIT Press, vol. 5(1), pages 42-64, Winter.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:31:y:2003:i:1:p:62-70. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.