Econ 101 Notes I – The Peltzman Effect

I’m about six chapters into my Econ 101 book (Mankiw: Essentials of Economics). I’m really enjoying it; lots of interesting stuff.

In the first chapter, as an example of tradeoffs, Mankiw refers to a study by one Sam Peltzman in 1975 which claimed to show that mandatory seat-belt laws had no effect on the overall death rate since people responded to the safer environment with riskier driving.

I haven’t read the study, but I can’t help but thinking that it’s crap. I mean, I never knew anyone who decided they could drive more recklessly because they put on a seatbelt. Skimming the web for opinions reveals a variety of opinions; Leavitt (the Freakonomics guy) disagrees with Peltzman’s thesis here: http://www.freakonomics.com/blog/2006/12/09/the-difference-between-theoretically-possible-and-important. The general counterarguments I’ve seen are:

• The data is bad, and doesn’t account for demographic changes.
• Other data shows the opposite.
• Anecdotal/intuitive evidence, as in my initial take
• If you only wear a seatbelt because the law requires you to, then you probably see no safety benefit to it, so why would you all of a sudden start driving more dangerously? Conversely, if you thought that wearing a seatbelt made you safer, then you would wear one whether there was a law or not, so the law would not change your behavior.

Ok, so the anti-seatbelt argument is crap. But the scuffle does raise my worst fears about economics, which is that it’s basically politics with a veneer of statistics. You have your own feelings about seatbelts and/or regulations, and then you try to present the data to prove that you’re right. Great.

But this brings me to another traffic-safety debate that I think about periodically. Next up: does speed kill?