TY  - JOUR
AU  - Cohen,Alma
AU  - Dehejia,Rajeev
TI  - The Effect of Automobile Insurance and Accident Liability Laws in Traffic Fatalities
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9602
PY  - 2003
Y2  - April 2003
UR  - http://www.nber.org/papers/w9602
L1  - http://www.nber.org/papers/w9602.pdf
N1  - Author contact info:
Alma Cohen
The Eitan Berglas School of Economics
Tel Aviv University
Ramat-Aviv, Tel-Aviv
ISRAEL
Tel: 011-972-3-640-993
E-Mail: almac@post.tau.ac.il

Rajeev H. Dehejia
Wagner School of Public Policy
New York University
295 Lafayette Street, 2nd floor
New York, NY 10012
Tel: 212-998-7435
E-Mail: rajeev@dehejia.net
AB  - This paper investigates the incentive effects of automobile insurance, compulsory insurance laws, and no-fault liability laws on driver behavior and traffic fatalities. We analyze a panel of 50 U.S. states and the District of Columbia from 1970-1998, a period in which many states adopted compulsory insurance regulations and/or no-fault laws. Using an instrumental variables approach, we find evidence that automobile insurance has moral hazard costs, leading to an increase in traffic fatalities. We also find that reductions in accident liability produced by no-fault liability laws have led to an increase in traffic fatalities (estimated to be on the order of 6%). Overall, our results indicate that, whatever other benefits they might produce, increases in the incidence of automobile insurance and moves to no-fault liability systems have significant negative effects on traffic fatalities.
ER  -