Monday, 9 March 2015

Safer driving and offsetting behaviour - Golden Gate Bridge edition

Having just covered unintended consequences and offsetting behaviour in ECON110, recent changes at the Golden Gate Bridge provide us with a graphic example. As John King at the San Francisco Chronicle reports:
The California Highway Patrol announced Thursday that it is stepping up enforcement of speed limits on the Waldo Grade in Marin as well as at the bridge and toll plaza. The reason is that in the days since the more secure movable median barrier was installed, the average speed of drivers on the approach from the north has jumped even though the speed limit was lowered from 55 to 45 miles per hour.
“We’re really seeing unreasonable speeds on the bridge, much faster than before,” said Priya David Clemens, a representative for the Golden Gate Bridge District. For whatever reason, including the possibility that drivers feel safer knowing a car won’t come barreling at them from the opposite direction, “we’ve noticed speeds going up,” Clemens said. “That’s why we asked the CHP to help us.”
I've written before about safer cars and offsetting behaviour, but I will reprise some of that material here:
Rational (or quasi-rational) drivers weigh up the costs and benefits of driving faster. The benefits include less time wasted on the roads (an opportunity cost - you give up some time you could spend doing something else). Moreover, the marginal benefits probably decrease the more a driver speeds (because opportunity costs increase the more time is wasted). The costs of driving faster include an increased risk of a serious car accident - this cost is made up of two parts: (1) the probability of a serious accident occurring; and (2) the health and other costs of the accident itself. The marginal costs increase as speed increases, because the probability of an accident and its seriousness both increase.
If they are optimising, the driver will choose to drive at the speed where the marginal benefit (MB) of driving faster is exactly equal to the marginal cost (MC0). This occurs at S0 in the diagram below. At this point, driving a little bit faster entails a higher additional cost than the benefit they would receive (which is why they will drive no faster than S0).

When driving is made safer (such as by installing a median barrier on the Golden Gate Bridge), this changes the incentives that drivers face. The cost of driving fast falls (since the chance of being involved in a head-on collision on the bridge is reduced). So, in the diagram above, marginal costs of speed are lower (MC1). This increases the optimal driving speed to S1. What we would observe then is drivers driving faster because of the perceptions of greater safety, with probably an overall increased chance of being involved in accidents (but fewer head-on accidents because of the median barrier). Indeed, according to the SF Chronicle article:
An uptick in minor accidents has been seen at the toll booths, she said, though exact numbers are unavailable.
Economists term changes in behaviour like this "offsetting behaviour", because the actions of the drivers act to offset the benefits of increased safety on the bridge. It's also referred to as a Peltzman effect, after Sam Peltzman who showed in this paper (JSTOR gated) that mandatory safety devices on cars, such as seat belts, do not reduce traffic deaths, and actually increase the number of non-fatal car accidents.

[HT: Marginal Revolution]

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