On the road again: traffic fatalities and auto insurance minimums
Prior research on policy-induced moral hazard effects in the auto insurance market has focused on the impact of compulsory insurance, no-fault liability, and tort liability laws on traffic fatalities. In contrast, this paper examines the moral hazard effect of a previously overlooked policy variable...
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| Format: | Article |
| Language: | English |
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Institute of Public Finance
2018-03-01
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| Series: | Public Sector Economics |
| Subjects: | |
| Online Access: |
http://www.pse-journal.hr/upload/files/pse/2018/1/yakovlev_orr_magulick.pdf
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| _version_ | 1818964189787455488 |
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| author | Pavel A. Yakovlev Christina M. Orr-Magulick |
| author_facet | Pavel A. Yakovlev Christina M. Orr-Magulick |
| author_sort | Pavel A. Yakovlev |
| collection | DOAJ |
| description | Prior research on policy-induced moral hazard effects in the auto insurance market has focused on the impact of compulsory insurance, no-fault liability, and tort liability laws on traffic fatalities. In contrast, this paper examines the moral hazard effect of a previously overlooked policy variable: minimum auto insurance coverage. We hypothesize that state-mandated auto insurance minimums may “over-insure” some drivers, lowering their incentives to drive carefully. Using a longitudinal panel of American states from 1982 to 2006, we find that policy-induced increases in auto insurance minimums are associated with higher traffic fatality rates, ceteris paribus. |
| first_indexed | 2024-12-20T12:57:10Z |
| format | Article |
| id | doaj.art-1d27e637241846ee96c28a9f324cb022 |
| institution | Directory Open Access Journal |
| issn | 2459-8860 |
| language | English |
| last_indexed | 2024-12-20T12:57:10Z |
| publishDate | 2018-03-01 |
| publisher | Institute of Public Finance |
| record_format | Article |
| series | Public Sector Economics |
| spelling | doaj.art-1d27e637241846ee96c28a9f324cb0222022-12-21T19:40:02ZengInstitute of Public FinancePublic Sector Economics2459-88602018-03-014242456510.3326/pse.42.1.32330On the road again: traffic fatalities and auto insurance minimumsPavel A. Yakovlev0Christina M. Orr-Magulick1 Department of Economics and Finance, Duquesne University, Pittsburgh, USA Gordon Rees Scully Mansukhani, Pittsburgh, USA Prior research on policy-induced moral hazard effects in the auto insurance market has focused on the impact of compulsory insurance, no-fault liability, and tort liability laws on traffic fatalities. In contrast, this paper examines the moral hazard effect of a previously overlooked policy variable: minimum auto insurance coverage. We hypothesize that state-mandated auto insurance minimums may “over-insure” some drivers, lowering their incentives to drive carefully. Using a longitudinal panel of American states from 1982 to 2006, we find that policy-induced increases in auto insurance minimums are associated with higher traffic fatality rates, ceteris paribus. http://www.pse-journal.hr/upload/files/pse/2018/1/yakovlev_orr_magulick.pdf traffic fatalities; auto insurance; minimums; moral hazard |
| spellingShingle | Pavel A. Yakovlev Christina M. Orr-Magulick On the road again: traffic fatalities and auto insurance minimums Public Sector Economics traffic fatalities; auto insurance; minimums; moral hazard |
| title | On the road again: traffic fatalities and auto insurance minimums |
| title_full | On the road again: traffic fatalities and auto insurance minimums |
| title_fullStr | On the road again: traffic fatalities and auto insurance minimums |
| title_full_unstemmed | On the road again: traffic fatalities and auto insurance minimums |
| title_short | On the road again: traffic fatalities and auto insurance minimums |
| title_sort | on the road again traffic fatalities and auto insurance minimums |
| topic | traffic fatalities; auto insurance; minimums; moral hazard |
| url |
http://www.pse-journal.hr/upload/files/pse/2018/1/yakovlev_orr_magulick.pdf
|
| work_keys_str_mv | AT pavelayakovlev ontheroadagaintrafficfatalitiesandautoinsuranceminimums AT christinamorrmagulick ontheroadagaintrafficfatalitiesandautoinsuranceminimums |