EconPapers    
Economics at your fingertips  
 

Reducing informational asymmetry impacts choices and improves safety: An evaluation of automobile crash tests

Damien Sheehan‐Connor
Authors registered in the RePEc Author Service: Damien Sheehan-Connor ()

Journal of Risk & Insurance, 2022, vol. 89, issue 3, 697-723

Abstract: Vehicle crash tests mitigate an informational market failure and provide substantial benefits to consumers. Consumers cannot accurately assess vehicle safety leading automakers to provide it suboptimally. Crash tests performed by the Insurance Institute for Highway Safety represent an attempt to mitigate this market failure. This paper presents evidence that automakers responded by producing safer vehicles and that consumers increased purchases of highly rated vehicles. A novel identification strategy using the year of vehicle redesign is used to evaluate the tests' safety impact. A lower‐bound estimate of program benefits is $3000 per vehicle resulting in an annual reduction of 1650 fatalities.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/jori.12375

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:bla:jrinsu:v:89:y:2022:i:3:p:697-723

Ordering information: This journal article can be ordered from
http://www.wiley.com/bw/subs.asp?ref=0022-4367

Access Statistics for this article

Journal of Risk & Insurance is currently edited by Joan T. Schmit

More articles in Journal of Risk & Insurance from The American Risk and Insurance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2022-12-08
Handle: RePEc:bla:jrinsu:v:89:y:2022:i:3:p:697-723