Mar 26, 2020

The Pelzman Effect

“The reduction of predicted benefit from regulations that intend to increase safety [aka risk compensation] is sometimes referred to as the Peltzman effect in recognition of Sam Peltzman, a professor of economics at the University of Chicago Booth School of Business, who published ‘The Effects of Automobile Safety Regulation’ in the Journal of Political Economy in 1975 in which he controversially suggested that ‘offsets (due to risk compensation) are virtually complete, so that regulation has not decreased highway deaths.’”

Related: Booth’s Rule #2

Source: Wikipedia