Are Drivers Behavioral Changes Negating the Efficacy of Mandated Safety Regulations?
Over the past twenty-five years, the federal government has taken an increasingly visible and proactive role in response to perceived market failures in automotive safety. Recent manifestations of that involvement include the requirement that all new automobiles have airbags by the mid-1990s and the extension of all automotive safety standards to light trucks by the year 2000. A sizeable body of economic literature has developed over the efficacy of government safety regulations. Predominantly benefit-cost based, much of that literature has been a response to Sam Pehzman, who concluded that government mandated safety regulation would have little net impact on the economic losses emanating from motor vehicle accidents. Peltzman argued that the market already addressed the nonregulatory demand for safety and that mandated safety devices may encourage driver carelessness. With regard to the latter point, Peltzman presented evidence that while mandated safety devices may have prevented the
