This paper presents an analysis of the effects of boating safety policies on accidents involving pleasure boats on state waterways. We focus on the impacts of law enforcement and youth certification policies, using ordinary least squares and negative binomial estimators that control for select demographic and geographical variables. Estimates from the negative binomial model are used in policy simulations to predict the outcomes of proposed boating safety policies. Our findings suggest that substantial reductions in accidents and property damages could be achieved through the uniform application of law enforcement and youth certification programs across the United States. The paper extends existing studies on automobile safety and demonstrates the usefulness of a maximum likelihood estimator for policy analysis.
{"title":"The Effects of Boating Safety Policies in the United States","authors":"Todd Gabe, D. Hite","doi":"10.2139/ssrn.904329","DOIUrl":"https://doi.org/10.2139/ssrn.904329","url":null,"abstract":"This paper presents an analysis of the effects of boating safety policies on accidents involving pleasure boats on state waterways. We focus on the impacts of law enforcement and youth certification policies, using ordinary least squares and negative binomial estimators that control for select demographic and geographical variables. Estimates from the negative binomial model are used in policy simulations to predict the outcomes of proposed boating safety policies. Our findings suggest that substantial reductions in accidents and property damages could be achieved through the uniform application of law enforcement and youth certification programs across the United States. The paper extends existing studies on automobile safety and demonstrates the usefulness of a maximum likelihood estimator for policy analysis.","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"447 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115858472","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper examines a class of phenomena that combine adverse network effects with moral hazard, using the motor vehicle market as an example to develop and illustrate the key concepts. It is hypothesized that consumers behave as if there is a network externality with respect to vehicle size: the more large vehicles there are on the roads, the greater a consumer’s propensity to seek protection from them by driving a large vehicle herself. One consequence of this is that motor vehicle manufacturers are discouraged from making large vehicles less hazardous to other motorists. The paper measures the network effect and consequent moral hazard using disaggregate data on choice of vehicle type and related household characteristics, combined with a state-level measure of the incidence of traffic fatalities. The results show that for each 1 million light trucks that replace cars, between 961 and 1,812 would-be car buyers decide to buy a light truck instead, in reaction to the increased risk of death posed by the incremental light trucks. This network effect, when run in reverse, creates egregious incentives for vehicle manufacturers: for every life saved due to safety innovations that make light trucks less deadly to other motorists, manufacturers can expect to sell about 31 fewer light trucks.
{"title":"Adverse Network Effects, Moral Hazard, and the Case of Sport-Utility Vehicles","authors":"Matthew G. Nagler","doi":"10.2139/ssrn.851226","DOIUrl":"https://doi.org/10.2139/ssrn.851226","url":null,"abstract":"The paper examines a class of phenomena that combine adverse network effects with moral hazard, using the motor vehicle market as an example to develop and illustrate the key concepts. It is hypothesized that consumers behave as if there is a network externality with respect to vehicle size: the more large vehicles there are on the roads, the greater a consumer’s propensity to seek protection from them by driving a large vehicle herself. One consequence of this is that motor vehicle manufacturers are discouraged from making large vehicles less hazardous to other motorists. The paper measures the network effect and consequent moral hazard using disaggregate data on choice of vehicle type and related household characteristics, combined with a state-level measure of the incidence of traffic fatalities. The results show that for each 1 million light trucks that replace cars, between 961 and 1,812 would-be car buyers decide to buy a light truck instead, in reaction to the increased risk of death posed by the incremental light trucks. This network effect, when run in reverse, creates egregious incentives for vehicle manufacturers: for every life saved due to safety innovations that make light trucks less deadly to other motorists, manufacturers can expect to sell about 31 fewer light trucks.","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"133 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115180823","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use contingent valuation to elicit WTP for a reduction in the risk of dying for cardiovascular and respiratory causes, the most important causes of premature mortality associated with heat wave and air pollution, among the Italian public. The purpose of this study is three-fold. First, we obtain WTP and VSL figures that can be applied when estimating the benefits of heat advisories, other policies that reduce the mortality effects of extreme heat, and environmental policies that reduce the risk of dying for cardiovascular and respiratory causes. Second, our experimental study design allows us to examine the sensitivity of WTP to the size of the risk reduction. Third, we examine whether the WTP of populations that are especially sensitive to extreme heat and air pollution - such as the elderly, those in compromised health, and those living alone and/or physically impaired - is different from that of other individuals. We find that WTP, and hence the VSL, depends on the risk reduction, respondent age (via the baseline risk), and respondent health status. WTP increases with the size of the risk reduction, but is not strictly proportional to it. All else the same, older individuals are willing to pay less for a given risk reduction than younger individuals of comparable characteristics. Poor health, however, tends to raise WTP, so that the appropriate VSL of elderly individuals in poor health may be quite large. Our results support the notion that the VSL is “individuated.â€
{"title":"Urban Environmental Health and Sensitive Populations: How Much are the Italians Willing to Pay to Reduce Their Risks?","authors":"A. Alberini, A. Chiabai","doi":"10.2139/ssrn.812966","DOIUrl":"https://doi.org/10.2139/ssrn.812966","url":null,"abstract":"We use contingent valuation to elicit WTP for a reduction in the risk of dying for cardiovascular and respiratory causes, the most important causes of premature mortality associated with heat wave and air pollution, among the Italian public. The purpose of this study is three-fold. First, we obtain WTP and VSL figures that can be applied when estimating the benefits of heat advisories, other policies that reduce the mortality effects of extreme heat, and environmental policies that reduce the risk of dying for cardiovascular and respiratory causes. Second, our experimental study design allows us to examine the sensitivity of WTP to the size of the risk reduction. Third, we examine whether the WTP of populations that are especially sensitive to extreme heat and air pollution - such as the elderly, those in compromised health, and those living alone and/or physically impaired - is different from that of other individuals. We find that WTP, and hence the VSL, depends on the risk reduction, respondent age (via the baseline risk), and respondent health status. WTP increases with the size of the risk reduction, but is not strictly proportional to it. All else the same, older individuals are willing to pay less for a given risk reduction than younger individuals of comparable characteristics. Poor health, however, tends to raise WTP, so that the appropriate VSL of elderly individuals in poor health may be quite large. Our results support the notion that the VSL is “individuated.â€","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114809103","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper demonstrates our analysis of a liability data set from Royal & SunAlliance. The liability data set is heavy-tailed and the analysis is based on a systematic, unified approach to the estimation of heavy-tailed loss distributions. The method has recently been developed in Royal & SunAlliance and is based on a parametric estimator, the heavy-tailed modified Champernowne distribution, which is corrected with a non-parametric estimator. The correction is obtained by transforming the data set with the estimated modified Champernowne cdf and then estimating the density of the transformed data set by using the classical kernel density estimator. In this paper, we also demonstate a simulation study that calculates the expected cost and the volatility in the liability portfolio, which are fundamental for calculating the premium.
{"title":"Claims Cost Estimation of Large Insurance Losses","authors":"Tine Buch-Kromann","doi":"10.2139/ssrn.715941","DOIUrl":"https://doi.org/10.2139/ssrn.715941","url":null,"abstract":"This paper demonstrates our analysis of a liability data set from Royal & SunAlliance. The liability data set is heavy-tailed and the analysis is based on a systematic, unified approach to the estimation of heavy-tailed loss distributions. The method has recently been developed in Royal & SunAlliance and is based on a parametric estimator, the heavy-tailed modified Champernowne distribution, which is corrected with a non-parametric estimator. The correction is obtained by transforming the data set with the estimated modified Champernowne cdf and then estimating the density of the transformed data set by using the classical kernel density estimator. In this paper, we also demonstate a simulation study that calculates the expected cost and the volatility in the liability portfolio, which are fundamental for calculating the premium.","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-03-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121567393","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Master Settlement Agreement (MSA) between the major tobacco companies and 46 states created an abrupt 45 cent (21%) increase in cigarette prices in November, 1998. Earlier estimates of the elasticity of prenatal smoking implied that the price rise would reduce prenatal cigarette smoking by 7% to 21%. Using birth records on 10 million U.S. births between January 1996 and February 2000, we examined the change in smoking during pregnancy and conditional smoking intensity in response to the MSA. Overall, adjusting for secular trends in smoking, prenatal smoking declined much less than predicted in response to the MSA.
{"title":"The Effect of the 1998 Master Settlement on Prenatal Smoking","authors":"Douglas Levy, Ellen Meara","doi":"10.3386/W11176","DOIUrl":"https://doi.org/10.3386/W11176","url":null,"abstract":"The Master Settlement Agreement (MSA) between the major tobacco companies and 46 states created an abrupt 45 cent (21%) increase in cigarette prices in November, 1998. Earlier estimates of the elasticity of prenatal smoking implied that the price rise would reduce prenatal cigarette smoking by 7% to 21%. Using birth records on 10 million U.S. births between January 1996 and February 2000, we examined the change in smoking during pregnancy and conditional smoking intensity in response to the MSA. Overall, adjusting for secular trends in smoking, prenatal smoking declined much less than predicted in response to the MSA.","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"144 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114599505","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study optimal policies composed of pollution standards, probabilities of inspection and fines dependant on the degree of noncompliance with the standards, in a context where regulated firms own private information.In contrast with previous literature, we show that optimal policies, being either pooling or separating, can imply violations to strictly positive standards.This results crucially depends on the monitoring costs, the types of firms and the regulator's degree of uncertainty.
{"title":"Optimal Environmental Standards Under Asymmetric Information and Imperfect Enforcement","authors":"Carmen Arguedas","doi":"10.2139/ssrn.670128","DOIUrl":"https://doi.org/10.2139/ssrn.670128","url":null,"abstract":"We study optimal policies composed of pollution standards, probabilities of inspection and fines dependant on the degree of noncompliance with the standards, in a context where regulated firms own private information.In contrast with previous literature, we show that optimal policies, being either pooling or separating, can imply violations to strictly positive standards.This results crucially depends on the monitoring costs, the types of firms and the regulator's degree of uncertainty.","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132068622","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2005-01-01DOI: 10.1111/J.1468-2230.2005.00529.X
Jon P. Lowry, P. Rawlings
This article examines the refusal of the English courts to award damages for consequential losses following unreasonable delay on the part of insurers in settling a claim. This has the potential to give rise to dire consequences for insureds. These difficulties have been addressed in North American jurisdictions where the concept of good faith has been developed and applied as a means of both compensating insureds and regulating the conduct of insurers. However, a hallmark of English law is that it fails to draw a bright line between the law of contract and the law of contracts. As a result, the policy issues that should inform insurance contracts are excluded by virtue of the notion, imported from the law of contract, that the contractual relationship is a matter of private law and is not, therefore, a means for public regulation of insurers.
{"title":"Insurers, Claims and the Boundaries of Good Faith","authors":"Jon P. Lowry, P. Rawlings","doi":"10.1111/J.1468-2230.2005.00529.X","DOIUrl":"https://doi.org/10.1111/J.1468-2230.2005.00529.X","url":null,"abstract":"This article examines the refusal of the English courts to award damages for consequential losses following unreasonable delay on the part of insurers in settling a claim. This has the potential to give rise to dire consequences for insureds. These difficulties have been addressed in North American jurisdictions where the concept of good faith has been developed and applied as a means of both compensating insureds and regulating the conduct of insurers. However, a hallmark of English law is that it fails to draw a bright line between the law of contract and the law of contracts. As a result, the policy issues that should inform insurance contracts are excluded by virtue of the notion, imported from the law of contract, that the contractual relationship is a matter of private law and is not, therefore, a means for public regulation of insurers.","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132495419","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers update their beliefs after observing the first case and subsequently fine-tune their precautions to avoid accidents. The joint incentive of the plaintiff and the first defendant to create public information through litigation is too small. The optimal liability rule trades off providing future injurers with incentives to take precautions and providing the plaintiff with incentives to create information.
{"title":"Information and Externalities in Sequential Litigation","authors":"X. Hua, K. Spier","doi":"10.2139/SSRN.556163","DOIUrl":"https://doi.org/10.2139/SSRN.556163","url":null,"abstract":"The information created and disseminated through the litigation process can have social value. Suppose a long-lived plaintiff is suing a defendant for damages sustained in an accident. The plaintiff may suffer similar damages in future accidents involving different defendants. Potential injurers update their beliefs after observing the first case and subsequently fine-tune their precautions to avoid accidents. The joint incentive of the plaintiff and the first defendant to create public information through litigation is too small. The optimal liability rule trades off providing future injurers with incentives to take precautions and providing the plaintiff with incentives to create information.","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"35 6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130730267","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The first generation of genetically modified (GM) crop varieties sought to increase farmer profitability through cost reductions or higher yields. The next generation of GM food research is focusing also on breeding for attributes of interest to consumers, beginning with"golden rice,"which has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of unskilled laborers in developing countries. The authors analyze empirically the potential economic effects of adopting both types of innovation in Sub-Saharan Africa (SSA). They do so using the global economy-wide computable general equilibrium model known as GTAP. The results suggest that the welfare gains are potentially very large, especially from nutritionally enhanced GM wheat and rice, and that-contrary to the claims of numerous interests-those estimated benefits are diminished only slightly by the presence of the European Union's current barriers to imports of GM foods. In particular, if SSA countries impose bans on GM crop imports in an attempt to maintain access to EU markets for non-GM products, the loss to domestic consumers due to that protectionism boost to SSA farmers is far more than the small economic gain for these farmers from greater market access to the EU.
{"title":"Implications of Genetically Modified Food Technology Policies for Sub-Saharan Africa","authors":"K. Anderson, L. Jackson","doi":"10.1596/1813-9450-3411","DOIUrl":"https://doi.org/10.1596/1813-9450-3411","url":null,"abstract":"The first generation of genetically modified (GM) crop varieties sought to increase farmer profitability through cost reductions or higher yields. The next generation of GM food research is focusing also on breeding for attributes of interest to consumers, beginning with\"golden rice,\"which has been genetically engineered to contain a higher level of vitamin A and thereby boost the health of unskilled laborers in developing countries. The authors analyze empirically the potential economic effects of adopting both types of innovation in Sub-Saharan Africa (SSA). They do so using the global economy-wide computable general equilibrium model known as GTAP. The results suggest that the welfare gains are potentially very large, especially from nutritionally enhanced GM wheat and rice, and that-contrary to the claims of numerous interests-those estimated benefits are diminished only slightly by the presence of the European Union's current barriers to imports of GM foods. In particular, if SSA countries impose bans on GM crop imports in an attempt to maintain access to EU markets for non-GM products, the loss to domestic consumers due to that protectionism boost to SSA farmers is far more than the small economic gain for these farmers from greater market access to the EU.","PeriodicalId":168354,"journal":{"name":"Torts & Products Liability Law","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129645729","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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