Question

What would you expect as a result of the auto safety regulations that require seatbelts, etc.? according to Steven Landsburg book the arm chair economist.

Answer 1

This question arises from the chapter 1 named as “power of incentives: how seat belts kill" of the book “ THE ARMCHAIR ECONOMIST ” by Steven Landsburg.

The first line of the chapter says it all, People respond to incentives. Author expresses his intentions pretty clear by making a brilliant opening statement. In this chapter he has questioned the 1st economic principle. He states an example about the American Petroleum Industry where petrol prices were subsidized and this led to creation of huge number of queues at petrol pumps but when the subsidies were removed the queues vanished too.

In 1965, Ralph Nader published Unsafe at Any Speed, a book calling attention to various design elements that made cars more dangerous than necessary. The federal government

soon responded with a wide range of automobile safety legislation, mandating the use of seat belts, padded dashboards, collapsible steering columns, dual braking systems, and penetration-resistant windshields.

Even before the regulations went into effect, any economist could have predicted one of their consequences: The number of auto accidents increased. The reason is that the threat of being killed in an accident is a powerful incentive to drive carefully. But a driver with a seat belt and a padded dashboard faces less of a threat. Because people respond to incentives, drivers are less careful. The result is more accidents.

Law on making the seat belts mandatory was meant as an incentive for people to make the drives safer, but studies were to tell otherwise. Studies over a period of time suggested that the number of accidents have increased over the years. They were greater than the times when people were forced to drive carefully in the absence of the seat belts.

The author further augmented the same concept by stating the example of contraceptives sign of baby being on board to build on the same subject. But as he narrates further he concedes and eventually concludes that such an exercise of finding faults within this principal is a pointless exercise. Mockingly stating examples for research conducted on rats and pigeons he provese that even rats and pigeons work harder when there is an incentive of higher pay (more food) and drink less beer when their prices go up.

I completely agree with the words of author.