Many countries have lowered their breath alcohol limits for driving in recent years. New Zealand lowered the limit from 400 micrograms of alcohol per litre of breath to 250 in December 2014. The idea is (unsurprisingly) that fewer people would drive while intoxicated, leading to fewer accidents and fewer injuries and deaths. It is unclear what the effect of the change in New Zealand was (statistically, it is difficult to determine), but this new working paper by Javier Portillo (University of Louisiana at Lafayette), Wisnu Sugiarto (Washington State University), and Kevin Willardsen (Wright State University). In March 2017, Utah became the first state in the U.S. to lower the blood alcohol limit from 0.08 g/dL to 0.05 (this is equivalent to the change in breath alcohol limit that New Zealand adopted). Portillo et al. look at the effect of that change on traffic accidents, using:
...a difference-in-differences (DID) estimator on Utah counties using the counties of neighboring states - Idaho, Nevada, Colorado, and Wyoming - as controls.
Essentially, this DID strategy involves comparing the difference between two differences: (1) the difference in traffic accidents before and after the limit change for Utah counties; and (2) the difference in traffic accidents before and after the limit change for neighbouring counties outside Utah. The assumption here is that the two differences would be the same if Utah had not reduced the drink driving limit.
Portillo et al. use data collected independently from each state's Department of Transportation (presumably, there is no central data repository where appropriate data are available). They find that:
...the policy reduced the total number of traffic accidents in Utah. This drop, is primarily in property damage-only accidents in urban counties... Effects during the day are twice the size relative to those at night, and several times larger than those found on weekend nights where we would expect the largest result. Estimates suggest a reduction of approximately 74 and 34 property damage accidents, per quarter, for the median urban county for days and nights respectively, which is roughly an 8.5 and 4.0 percent reduction in total accidents.
These results seem a bit puzzling. You would expect a change in the drink driving limit to affect night-time crashes rather than day-time crashes, and to affect crashes that involve injuries, rather than property-damage-only crashes. However, Portillo et al. then discuss the incentive effects related to the law change:
A possible explanation for the observed outcome is that the policy is doing more to driver behavior than just preventing drivers with a BAC between a 0.05-0.08 from driving. The costs of a DUI in Utah are high. Driving under the influence is considered a class B misdemeanor, at the very least (and a class A misdemeanor under other circumstances)...
Keeping these costs in mind, consider the following scenario. An individual has few drinks at brunch, lunch, or early dinner and gets into an accident. If the accident involves an injury, police are notified and dispatched, they take a report, and the driver risks a DUI because she must interact with the officers. However, if the accident is property damage only, there are no legal requirements to involve police if the estimated damages are under $1,500.47 Instead of risking the DUI and its consequences, the driver takes responsibility for the accident, exchanges insurance information, and leaves. This is done because it may cheaper than a DUI in the long run. If the police never arrive, the accident is never reported; but this will only happen for property damage only accidents. The one thing that typically guarantees the arrival of police is an injury. If it is during the weekday, where we find the largest effect, individuals may also have a reason to resolve such issues with haste (or not wait for the police): work... This may explain the over representation of a fall in property damage only accidents we have identified. It is not so much that the accidents are not taking place, but that they are not being reported. This suggests that at least some of the effect found is not a reduction in total accidents, but a reduction in the reporting of property damage only accidents.
As anyone who has done any economics class should know, people respond to incentives. The change in the drink driving limit creates a stronger incentive not to drink and drive, but it also creates a stronger incentive not to report minor accidents. If minor accidents are being reported less in Utah than in other counties after the change in the drink driving limit, than that would appear to show a reduction in minor traffic accidents, as Portillo et al. find, even if the rate of more serious injury accidents does not change at all. The disappointing result here from a research perspective is that the incentive effects mean that we don't end up knowing whether the law change resulted in a reduction in motor vehicle accidents overall, or not.
[HT: Marginal Revolution]
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