On the road again: traffic fatalities and auto insurance minimums

Pavel A. Yakovlev () and Christina M. Orr-Magulick ()
Additional contact information
Pavel A. Yakovlev: Department of Economics and Finance, Duquesne University, Pittsburgh, USA
Christina M. Orr-Magulick: Gordon Rees Scully Mansukhani, Pittsburgh, USA

Public Sector Economics, 2018, vol. 42, issue 1, 45-65

Abstract: Prior research on policy-induced moral hazard effects in the auto insurance market has focused on the impact of compulsory insurance, no-fault liability, and tort liability laws on traffic fatalities. In contrast, this paper examines the moral hazard effect of a previously overlooked policy variable: minimum auto insurance coverage. We hypothesize that state-mandated auto insurance minimums may „over-insure“ some drivers, lowering their incentives to drive carefully. Using a longitudinal panel of American states from 1982 to 2006, we find that policy-induced increases in auto insurance minimums are associated with higher traffic fatality rates, ceteris paribus.

Keywords: traffic fatalities; auto insurance; minimums; moral hazard (search for similar items in EconPapers)
JEL-codes: G22 H7 J28 K13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.pse-journal.hr/upload/files/pse/2018/1/yakovlev_orr_magulick.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ipf:psejou:v:42:y:2018:i:1:p:45-65

DOI: 10.3326/pse.42.1.3

Access Statistics for this article

More articles in Public Sector Economics from Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Martina Fabris ().