BIAS OF THE WEEK

Risk compensation

In 1975, economist Sam Peltzman analyzed the effects of automobile safety regulations on driver behavior

Safety measures like seat belts reduced fatalities, but they also encouraged riskier driving behaviors, such as speeding.

This “compensating behavior” diminished the safety benefits, highlighting the complex relationship between between regulations and driver actions.

The Peltzman Effect suggests that when people perceive a lower risk, they tend to engage in riskier behavior

See the full study here :

Peltzman, S. (1975). The effects of automobile safety regulation. Journal of Political Economy, 83(4), 677–725. https://doi.org/10.1086/260352

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