!!Экзамен зачет 2023 год / Tort liability versus other approaches

(Cite as: 14 Int'l Rev. L. & Econ. 53)

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[FNb]

age

© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

(Cite as: 14 Int'l Rev. L. & Econ. 53)

0.13-0.23

revocation

for DUI

0.63-0.17

© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

(Cite as: 14 Int'l Rev. L. & Econ. 53)

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FN1 Standard errors are in parentheses. The coefficient on per capita income

and the fines have been multiplied by 10,000, license revocation by 1000, and

alcohol price by 100.

FN2 All regressions contain binaries for states, with California the omitted

reference group.

FNa Statistically significant at the 1% level (two-tailed test).

© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

(Cite as: 14 Int'l Rev. L. & Econ. 53)

FNb Statistically significant at the 5% level (two-tailed

test).

FNc Statistically significant at the 10% level (two-tailed

test).

*65 several of the parameter estimates on the tort liability and insurance variables lose statistical significance. Among these variables, by far the least promising results are for comparative versus contributory negligence rules. The tort and liability insurance variables generally have no effect on fatality rates of persons under age 21.

The coefficients on the dram shop liability are negative and statistically significant at the 5% level or better in all six regressions. Except for the 18-20 age group, where the dram shop liability variable refers to laws serving minors, coefficients are smaller with the time variables included. The coefficients imply that implementing dram shop laws causes reductions in traffic fatalities ranging from 10% (reg. no. 3) to 4% (reg. no. 5). [FN37]

We used two specifications of compulsory liability insurance. In one (Specification A, Table 3), compulsory liability insurance was interacted with the mean surcharge imposed for a DUI conviction by insurers in the state. Results with this specification are also shown in Table 2. In an alternative specification (Specification B, Table 3), compulsory liability insurance was interacted with the mean surcharge for a chargeable accident.

For persons over age 21, compelling drivers to buy liability insurance and imposing a substantial premium surcharge for DUI or chargeable accidents leads to fewer

TABLE 3. Effects of surcharges of compulsory liability insurance us-

ing

alternative measure of surcharge

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A

0.43

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(Cite as: 14 Int'l Rev. L. & Econ. 53)

1.35-1.72 -1.00 -1.03

liability

0.81-0.75 -0.09 -0.04

included?

[FN2]

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© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

(Cite as: 14 Int'l Rev. L. & Econ. 53)

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FN1 Standard errors are in parentheses.

FN2 All regressions contain binaries for states, with California the omitted

reference group.

FNa Statistically significant at the 1% level (two-tailed test).

FNb Statistically significant at the 5% level (two-tailed test).

FNc Statistically significant at the 10% level (two-tailed test).

*66 fatalities. The parameter estimates are statistically significant in the regressions with the time variables. With time excluded, they are in the anticipated direction and about the same magnitude, but they are statistically insignificant. The size of the surcharge needed to deter fatalities varies by age group and reason (DUI or chargeable accident) for which the surcharge is imposed.

Although the effect of compelling drivers to purchase liability insurance is positive when very low surcharges are imposed, for persons 21-24 the effect of compulsory insurance becomes negative at a surcharge for DUI of 41% (reg. no. 4). The corresponding surcharges for chargeable accidents at which the effect of compulsory insurance becomes negative are 156% and 161%. The mean surcharge (state mean) for a DUI was 163 and for a chargeable accident 37% (Sloan and Githens, forthcoming).

For persons over age 25, the effect of compulsory insurance becomes negative at surcharges for DUI of 42% (reg. no. 6, Specification A, Table 3) and at surcharges for a chargeable accident of 250% (reg. no. 6, Specification B). Clearly, the DUI surcharges deter careless driving in persons over age 25, and the DUI surcharges can be set at a rather modest level to have an effect. Compulsory insurance apparently has no effect on driving behavior of teenagers.

No-fault insurance, as measured by the fraction of automobile claims barred from tort liability, has a positive and statistically significant effect in three out of the four regressions for the adult group. Again, there is no effect on youths.

The coefficient of 0.72 (reg. no. 6, Table 2) implies that raising the fraction of claims barred from tort liability from 0 to 0.25 increases the fatality rate by 18%. Imposing a requirement that individuals purchase firstparty personal insurance *67 protection policies without barring claims from tort liability increased the motor vehicle fatality rate of adults, but to a lesser extent than implementation of no-fault automobile insurance laws that affect victims' ability to sue. As discussed previously, PIP policies are subject to surcharges. Apparently, however, any effect of surcharges on making drivers more cautious is more than offset by the effect of moral hazard when such insurance is imposed.

By contrast, there is no suggestion that the movement away from the contributory negligence rule has reduced the incentive for drivers to take care. Not only do the signs on the coefficients vary, but the standard errors generally exceed their associated coefficients.

Real per capita income has a positive effect on fatalities, with or without the time variables. With time included, the effect of income is much greater in the regressions for adults. These coefficients plausibly reflect the influence of income on alcohol consumption in part. [FN38] Income may affect the amount of driving, but miles driven is included as an explanatory variable. If decreased wealth (proxied here by income) lowers the incentive to take care, this relationship is more than offset by other factors operating in the other direction. Although by

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1990 there was compulsory automobile liability insurance in the vast majority of states (Table 1), the liability limits on required coverage tended to be low, especially relative to the wealth of more affluent drivers. [FN39] Compulsory insurance does not explain this result, which is the reverse of that expected from the theory.

Other Policies

Alcohol price only has a negative and statistically significant impact on motor vehicle fatalities in regressions for persons aged 18-20 with associated price elasticities of -0.59 (reg. no. 1) and -0.63 (reg. no. 2). The effect of alcohol price is attenuated when the minimum drinking age is in effect. In fact, when the minimum drinking age is set at age 18, the effect of alcohol price is completely offset. The parameter estimates on the minimum drinking age variable imply that raising the drinking age from 18 to 21 reduced the fatality rate of persons in the 18-20 age group by 12-13%.

Both mandatory jail terms and mandatory license revocation for a first DUI conviction show plausible results. Mandatory jail terms did not affect fatality rates for the youngest group of drivers. Although license revocation has a negative and statistically significant impact in five out of the six regressions, the associated elasticities are always less than 0.02 (in absolute value). When jail terms have a statistically significant effect, the marginal impact is greater than for license revocations. The signs on the coefficients for full-time equivalent police per 1000 population are negative in five out of the six regressions, but they are only statistically significant in three. The associated elasticities are -0.43 for the 18-20 age group (reg. no. 1) and - 0.26 for the 25-64 age group (reg. no. 5). Although the signs on the coefficients on the variable for seatbelt fine are uniformly negative, none are statistically significant at conventional levels.

*68 Other Factors

The number of miles driven has positive and statistically significant effects on fatality rates in two out of the six regressions. Apparently miles driven is not a reliable predictor of fatalities. The fraction of rural miles always has a positive impact on fatalities, and the coefficients are statistically significant in three regressions. Since they are essentially time invariant, these two variables perform better without the state binaries (not shown).

V. Discussion and Conclusions

Overall, it appears that imposing tort liability has a deterrent effect on careless driving. This study's three major findings are first, imposing dram shop liability on commercial servers of alcohol reduces motor vehicle fatalities; second, compulsory liability insurance does not blunt the deterrent effect if drivers are made to pay higher insurance premiums for failure to exercise care; and third, the trend away from contributory to various forms of comparative negligence has had no effect on driving behavior, at least as measured by motor vehicle fatality rates.

The relationship between dram shop laws and traffic deaths was always statistically significant at conventional levels. Given more than 40,000 annual traffic fatalities, a 4-10% reduction is certainly consequential. [FN40]

The number of states with dram shop laws has grown appreciably in spite of opposition from the liquor industry, in part stimulated by the federal government's conditioning supplemental highway funding on state adoption of some form of dram shop law. A useful extension of this research would be to observe the extent to which establishments that are at comparative risk of being sued for dram shop liability actually do monitor patron behavior.

This study's research addressed two issues about compulsory liability insurance: (1) whether a move from voluntary to compulsory insurance without surcharges increases fatality rates and (2) whether a move from compulsory insurance without surcharges to compulsory insurance with surcharges decreases fatality rates. Our empirical analysis answers both questions in the affirmative. The notion of surcharging, attractive from the vantage point of deterrence, conflicts with the principle that driving is an inalienable right; there may be a tradeoff between deterrence and some persons' view of fairness. We found that imposing premium surcharges did not af-

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fect teenage fatality rates. Probably this should come as no surprise.

At least for persons over age 21, this study's results imply that increasing the fraction of accidents barred from tort liability by enacting no-fault automobile insurance statutes increases the traffic fatality rate, although the coefficients are sensitive to inclusion of the year variables. The empirical tests are limited in two important additional *69 respects, however. First, the main trend during the observational period was the erosion of the tort threshold. No state implemented and only one state dropped its no-fault insurance laws. Overall, compared to the 1970s, there were few changes in no-fault insurance laws during the 1980s. Second, unlike other coun- tries--Quebec in Canada, New Zealand, Israel, and Sweden--the United States has never really experimented with automobile no-fault. Thus, the United States is not the ideal location to study the effects of no-fault laws on drivers' incentives to take care.

We did not obtain a direct measure of the extent of PIP surcharges. From our survey of insurance departments, we learned that surcharges are generally possible. But it is not known how frequently such policies are actually surcharged and in what amounts. With rare exceptions, respondents at the departments believed that surcharges are imposed on PIP. The fact that we obtained positive coefficients on the coefficients for compulsory PIP suggests that such surcharges tend to be infrequent and minor. More direct evidence, however, is needed to settle this issue. In some states, the required amount of PIP coverage is so low that it is somewhat surprising to have found an effect on mortality in either direction.

Changing from contributory to various forms of comparative negligence rules had no impact on traffic fatality rates in our analysis. From these results, it would appear that policymakers who believe that comparative negligence is inherently fairer can implement this type of rule without fear of increasing motor vehicle deaths.

Clearly tort liability is not the only deterrent. Following previous research, both alcohol price and minimum drinking age affect traffic mortality in this study (Cook and Tauchen, 1984; Males, 1986; Saffer and Grossman, 1987a, 1987b). [FN41]

Both mandatory jail terms and license revocation reduce motor vehicle mortality, jail more so for older than younger persons, and revocation more for youths than for older persons. But even mandatory license revocation, which appears to be a major deterrent for persons aged 18-20, has a much smaller marginal effect than the minimum drinking age. One problem with any mandatory sanction is that the probability of getting caught is low unless there is an accident. [FN42] Establishments that sell alcoholic beverages should have an incentive to monitor purchases by minors because, for one, they may lose their licenses if caught. Some of our regressions suggest that more police manpower reduces traffic mortality, but in our analysis these results were very sensitive to inclusion of the year variables.

Finally, given our findings, how does tort liability compare with other approaches for lowering traffic fatalities? The answer is that it depends. For youths, increasing the price and decreasing the availability of alcohol by means of minimum drinking age laws, and possibly increasing the number of police officers clearly dominates changes in tort liability, compulsory insurance, and mandatory criminal penalties. For persons over age 25, minimum drinking age laws are no longer pertinent, and alcohol price appears to have no effect. For such persons, tort liability and insurance law have greater roles to play in affecting motor vehicle fatality rates. For the latter group, if policymakers alter tort liability rules and insurance purely in the interest of improving compensation to accident victims and flattening premium structures to drivers, there is indeed a price to pay in terms of the public's health.

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