The 'Arms Race' on American Roads: The Effect of Heavy Vehicles on Traffic Safety and the Failure of Liability Rules
29 Pages Posted: 4 Jun 2003
Date Written: November 2002
Drivers have been running an "arms race" on American roads by buying increasingly heavy vehicles such as SUVs, vans and light trucks. An important reason for the popularity of large vehicles is that families view them as providing better protection to their occupants if a crash occurs. But when families drive larger vehicles, they pose an increased danger to occupants of smaller vehicles and to pedestrians and bicyclists. This paper measures both the beneficial internal effect of heavier vehicles on their own occupants' safety and the negative external effect of heavier vehicles on occupants of cars, pedestrians and bicyclists. The main result is that when drivers replace cars with light trucks, 3,700 additional crashes per year involving fatalities of smaller vehicle occupants, pedestrians and bicyclists occur, while only 1,400 crashes involving fatalities of light truck occupants are avoided, i.e., the ratio of negative external effects to positive internal effects is 2-1/2 to 1. The paper argues that none of the existing traffic laws or institutions forces drivers of heavy vehicles to take account of their negative external effects.
Keywords: liability rules, externalities, traffic, accidents, fatalities, external effects
JEL Classification: K0, R4
Suggested Citation: Suggested Citation