Undercover Economist

Driven to destruction

The Undercover Economist – FT Magazine, 4 February

The trouble with cars these days is that they’re too safe. Of course, I don’t write as a driver; I write as a cyclist. Drivers quite reasonably feel that they’re so well protected by their seatbelts, bull-bars, airbags, ejector seats and the rest that they can afford to take risks. Cyclists and pedestrians are the ones on the receiving end.

We need more dangerous cars. A spear mounted on the steering wheel, pointing at the driver’s heart, would do nicely. Cheese wire instead of seat belts would work too. Of course, these innovations would skewer and slice the typical crash-test dummy, but drivers aren’t crash-test dummies. Give them the right incentive and they will drive more carefully, to the benefit of the cyclists and pedestrians.

The idea that seatbelts cause accidents is so ridiculous it could only have come from an economist. That economist is Sam Peltzman, who in 1975 published a paper demonstrating that drivers did indeed drive more dangerously after mandatory seatbelt laws were passed in the US. He argued that despite technological evidence showing that seatbelts save lives in a given accident, there was no evidence that the seatbelt laws had reduced driver fatalities. In other words, drivers take advantage of seatbelts to drive more dangerously rather than to live longer. More compellingly, Peltzman detected a rise in pedestrian and cyclist fatalities when seatbelt laws were passed.

A little thought suggests that Peltzman isn’t quite as deranged as he first appears. We struggle with the idea of driving more dangerously but most of us accept the idea that a driver could choose to drive more safely. Logically, if he could choose to drive more safely he could also choose not to drive more safely.

Think about those occasions when your car’s safety features have let you down: the seatbelt mechanism is stuck; the one-year-old is on someone’s lap because the baby seat is elsewhere; one headlight is on the blink. In those situations, you drive more carefully – more slowly, less aggressively, with less attention to the CD under the seat or the incoming phone calls. And that means that when the safety systems are all operating well, you don’t drive as carefully.

Subsequent research has differed over the importance of the “Peltzman effect”. Steven Peterson, George Hoffer and Edward Millner, economists at Virginia Commonwealth University, published research in the mid-1990s showing that airbags seemed to cause more insurance claims for injury and more police reports of aggressive driving. But Alma Cohen of Harvard and Liran Einav at Stanford recently argued that while seatbelts don’t seem to save as many lives as they’re supposed to, pedestrians and cyclists are not at risk.

I’m forced to concede that if safety features encourage drivers to jabber on mobile phones and break the speed limit with relative impunity, then that is a benefit to those drivers, though it may not be the benefit that legislators or safety engineers had in mind. So I am tempted to argue in favour of a few safety features aimed at protecting the rest of us: rubber bumpers, automatic speed limiters, and perhaps the return of the man with the red flag walking in front of each vehicle.

The only trouble is that if these ideas catch on, we cyclists are likely to overcompensate and run red lights, leave our cycle lights and helmets at home, and whizz along on the wrong side of the road. More than we do already, I mean.