Does the Enforcement Design Exacerbate the ‘Peltzman Effect’? Evidence from Driver Record Point and Road Safety in Italy

Posted: 11 Mar 2010  

Antonio Nicita

University of Siena - Department of Economics

Simona Benedettini

University of Siena - Department of Economics

Date Written: March 10, 2010

Abstract

The ‘Peltzman effect refers to a moral hazard case where people react to safety regulation by increasing other risky behaviors. We investigate whether the enforcement design affects the emergence and the extent of offsetting responses after the introduction of a point – record driving license in Italy. We find that the new sanction mechanism reduced road accidents but produced heterogeneous effects on traffic offenses. Actually, if seat belt offenses benefitted the most by the adoption of the point - record driving license, deterrence of other driving behaviors occurred to a smaller and vanishing extent. Our results point out that seat belt use is generally associated with offsetting responses and that, specifically, compensatory behaviors has occurred with a relatively greater intensity under the penalty point system, through an increase in dangerous speeding and drunk driving offenses. We ascribe this last finding to drivers’ strategic re-directing of penalty points towards the most rewarding uses. Thus the new penalty point system has exacerbated compensatory behaviors. Some policy options are then suggested.

Keywords: offsetting behavior, point – record driving license, seat bealts, traffic law enforcement, traffic fatalities

JEL Classification: D02, K32, K42, L51

Suggested Citation

Nicita, Antonio and Benedettini, Simona, Does the Enforcement Design Exacerbate the ‘Peltzman Effect’? Evidence from Driver Record Point and Road Safety in Italy (March 10, 2010). Available at SSRN: https://ssrn.com/abstract=1568095

Antonio Nicita

University of Siena - Department of Economics ( email )

Piazza S. Francesco, 7
Siena, I-53100
Italy

Simona Benedettini (Contact Author)

University of Siena - Department of Economics ( email )

Piazza San Francesco 7
Siena, 53100
Italy

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