EclectEcon

Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre                                     A View from/of the Econochasm by John Palmer

Richard Posner deserves the next Nobel Prize in Economics
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Sam Peltzman, Don Cherry, John Palmer and the Seatbelt Phenomenon
In 1975, Sam Peltzman shook up the world of automobile safety with the publication of his article in the Journal of Political Economy, arguing that when people were forced to wear seatbelts, they tended, on average, to drive a bit more carelessly. (see here for a good summary by Peltzman of his work).

As Craig Newmark has pointed out, there have been numerous studies replicating the Peltzman result: when people are required to use more safety than they might have chosen, they end up taking less care in their activities. As I mentioned in an earlier posting, even Don Cherry noted this phenomenon in hockey: when young players were required to wear face masks, there was an increase in the incidence of high-sticking and slashing calls.

One of the on-going criticisms of this theory is, "People don't think that way." I have a confession. People (at least I) do tend to think this way sometimes. I can't believe this, but it happened several times, so I guess it was more than a random blip in human (or at least my) behaviour.

You may recall that late in the fall, I bought a pair of Neos "Stabilicers", overboots with metal studs on the bottom, and I was eagre to try them out. Understandably, I walked on more ice and was delighted with them. I now have little or no fear, walking on ice while wearing the Stabil-icers.

But here is the weird part. At least twice, while wearing the boots, I found myself driving on icy roads; and I actually caught myself thinking, "Gee, lucky thing I have my Stabilicers on". I don't know whether the thought affected my driving, but I can imagine that it might affect the driving of some people. No matter how stupid it was.
Category: Economics Posted on Wednesday, January 4, 2006 at 11:31pm
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