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Charles Wheelan, Ph.D. The Naked Economist

Charles Wheelan, Ph.D., The Naked Economist

Street Smarts: Economists Take on Traffic Safety

by Charles Wheelan, Ph.D.

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Posted on Tuesday, January 8, 2008, 12:00AM

I've just come back from New Orleans, where by a strange confluence of scheduling the BCS national championship football game overlapped with the annual meeting of the American Economic Association (AEA).

Bourbon Street was awash with thousands of Ohio State fans (red), thousands of LSU fans (purple), and thousands of economists (pasty people in suits). There's nothing quite like watching a Nobel Prize winner do a Jell-O shot off the stomach of an Ohio State cheerleader. (OK, I didn't actually see that, but it was theoretically possible.)

Big, Not So Easy

The BCS national championship is now old news, so I'll confine myself to the economists. One purpose of the annual meeting is to present a thousand or so papers on topics ranging from food stamps to prostitution. The most interesting session I sat through was not about saving Africa or fixing the public schools; those kinds of bold topics are often disappointing, because it turns out that we don't really know as much as we'd like.

Instead, a session with four papers on a more mundane topic caught my eye: traffic safety. Each study does what I think economics does best: 1) Ask a socially relevant question, and 2) Use data to answer that question, hopefully in a way that informs and improves public policy.

One of the papers was by Steven Levitt (the Freakonomics guy), and he's always good at stirring things up a bit. In fact, he said this paper has generated more anger than any work he's ever done, including his study that links legalized abortion to lower crime a generation later.

Counterintuitive Conclusions

I'll start with the socially relevant questions:

1. Do car seats for children over age two actually make them safer, compared to just wearing a regular seatbelt?

2. Do graduated licenses for young drivers make the roads safer? (Graduated licenses place limitations on new drivers during a specified learning period. Depending on the state, for example, they may only be allowed to drive during the day or with an adult in the car.)

3. Do motorcycle helmets save lives?

4. How dangerous are senior drivers?

The answers are:

1. Probably not.

2. Yes, but not for the reason you think.

3. Yes, definitely.

4. Very dangerous, but mostly to themselves.

The interesting part is how researchers come to these conclusions. I'll start with the finding that car seats for kids over age 2 probably aren't any safer than just putting them in the back seat with a regular seatbelt.

Sit Tight

Steven Levitt, along with coauthor Joseph Doyle from MIT, have analyzed large amounts of traffic accident data, some of it linked to hospital admission data, and find no significant difference in deaths or serious injuries between children restrained in a car seat and children restrained by a regular lap and shoulder seatbelt. There do appear to slightly more minor injuries (e.g., complaints of pain) to children in seatbelts relative to car seats. Levitt suggests that the cost of those minor injuries does not justify all the money we spend on car seats.

This seems heretical, given all the information we've been bombarded with about the importance of car seats. However, all of the data demonstrating their effectiveness simply compares car seats to no restraint at all. There's never been a comparison with seatbelts, which also seem to work well. In fact, Levitt and Doyle went to a crash test laboratory and ran their own crash tests with child dummies. They found that the effectiveness of the lap and shoulder seatbelt would've passed all federal requirements for car seats.

Car seats certainly don't make anything worse. One inadvertent advantage is that they make it far more likely that parents will put kids in the back seat instead of the front, which matters a lot for safety. Other countries, such as Canada, have regulations on car seats that are stricter than any U.S. state; perhaps those car seats bestow greater safety advantages. For now, however, Levitt (who has children) says that the most important reason to put young kids in car seats is that they sleep better.

Graduating Behind the Wheel

What about letting young drivers learn gradually? According to researchers from the RAND Corporation (a think tank), graduated licenses do make the roads safer, but not necessarily by making teens better drivers. Instead, graduated licenses just keep them off the road more, particularly with restrictions on night driving. Graduated licenses keep young drivers out of the car for long stretches relative to states that have fewer restrictions for the same age group. Teens who aren't in cars can't crash.

The authors find no evidence that graduated licenses produce better drivers. This raises interesting questions: Will the young drivers using graduated licenses simply have more accidents when they get older and spend more time on the road? Or will they be more mature then and make better, less risky decisions?

I suspect it's the latter; teenagers do particularly idiotic things. I vividly recall how much fun it was when I was 16 to drive around with Alex Irvine on the roof of my car. If research confirms my supposition, then the best policy might simply be to raise the driving age. This isn't just an academic question -- roughly 1,000 teenagers die every year in vehicle accidents.

Born to Be Wild?

Between 1997 and 2005, the number of motorcycle deaths roughly doubled, mostly because there are a lot more motorcycles on the road. Some 4,000 motorcyclists die a year -- roughly 10 percent of all traffic fatalities. Do motorcycle helmets make a difference?

Yes. The authors conclude: 1) Helmets protect riders, saving lives, and 2) Helmet laws put more riders in helmets (and keep some riders off the road), also saving lives. But getting to that conclusion is trickier than it would appear.

The big problem is that a direct comparison of fatality rates between riders with helmets and riders without helmets won't tell you very much. They may be different kinds of riders. Motorcyclists may put on a helmet when they expect to be riding faster or in more dangerous conditions. Or perhaps the safest riders are the ones who choose to wear helmets -- in which case their lower fatality rates would be the result of their safe riding, not the helmet.

Some motorcycle enthusiasts have argued for a long time that helmets might actually make things worse by obstructing the rider's vision or causing neck injury in the case of a crash. So researchers use clever techniques to isolate the effect of the helmet alone. For example, one approach is to study accidents in which one rider on a motorcycle is wearing a helmet and the other is not. This research, and other complementary approaches, all find that motorcycle helmets protect riders.

The libertarian in me feels compelled to point out that motorcyclists are most likely to harm themselves. Therefore, the fact that helmets save lives doesn't necessarily justify laws requiring that motorcyclists wear them. One of the study's authors suggested (in true economist fashion) that motorcycle riders should be exempt from helmet laws as long as they agree to be organ donors.

The 90-Year-Old Behind the Wheel

Older drivers die in car crashes at rates that look nearly as alarming as teen drivers. And the further they get past age 65, the worse it looks. There have been some highly publicized cases of older drivers losing control of their vehicles and doing horrible harm. How worried should you be about that old guy in the Cadillac driving slowly with his turn signal on?

Not as worried as the statistics might suggest, according to a study by David Loughran and Seth Seabury, both from RAND. True, older drivers are "moderately more likely to cause a crash," but the fatality numbers are inflated by the fact that the elderly are far, far more likely to die if a crash occurs than are middle-age adults or teens. By and large, older drivers are doing most of the damage to themselves.

This has divergent implications. On the private level, families worried about their older drivers should be worried. A disproportionate number of older drivers die in car crashes. But from a public policy standpoint, older drivers present less of a risk to everyone else than the raw numbers would suggest. Unlike teenage drivers, the elderly are not radically more likely to kill the rest of us.

AEA vs. BCS

This stuff matters. The Centers for Disease Control declared falling auto fatalities as one of the 10 great public health achievements of the 20th century. Those gains were built upon research like what I've just described.

I suspect the OSU and LSU fans had more fun in New Orleans than the economists. I'm hoping the economists' contributions will be more enduring.

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52 Comments

Showing comments 6-35 of 52<< PreviousNext >>
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  • Yahoo! Finance User - Monday, January 14, 2008, 6:48PM ET  Report Abuse

    • Overall: 5/5

    Speaking as someone who was at this conference, Dr. Wheelan's description in the first two paragraphs of this article are priceless.

  • kibbles - Monday, January 14, 2008, 10:38AM ET  Report Abuse

    • Overall: 4/5

    To finance user at 8:05. Those are some good points you raise. I haven't read the research (note that these were conference presentations that may not yet be widely available), but economists are generally quite careful in controlling for various phenomena in their studies. So, my guess is that your point 4 is covered adequately. The others, I'm not so sure. Part of the issue might be that, even though there is a fair chance that the authors have considered those things, they may not have the data to tease out those effects.

  • Yahoo! Finance User - Thursday, January 10, 2008, 1:53PM ET  Report Abuse

    • Overall: 4/5

    To the reviewer who posted earlier in response to helmets...I believe the THEORY is the social contract THEORY, not compact. Maybe if you knew what the name of it was, you would also know that society does not own your organs. You would also understand that in its broadest sense, the THEORY suggests that individuals give up certain rights to enjoy in the spoils of society (i.e., giving up the right to be able rape and plunder, which you could physically do...well, maybe not you). I did find it interesting that Wheelan conceded that topics such as education are boring and you realize that you don't know as much as you think you do. Didn't he write an article on how he would save education several months ago?

  • Yahoo! Finance User - Thursday, January 10, 2008, 11:13AM ET  Report Abuse

    • Overall: 3/5

    I wonder what Wheelan's article will be 5 years from now after the Green Nazi's force us all to drive light weight cars that aren't as safe? The gains in auto fatality reduction is due to cars being built strong enough to protect their passengers during a crash. If Left gets its way and all we have to drive is fuel efficient crap, the consequence is higher traffic fatalities. But, we will be saving Mother Earth!

  • Da Big Guy - Thursday, January 10, 2008, 7:44AM ET  Report Abuse

    • Overall: 3/5

    Dr. Wheelan, I took LSU and the points! Not bad economics huh? Did Yahoo Financial Page sponsor this Geekonomics conference?

  • Yahoo! Finance User - Wednesday, January 9, 2008, 11:10PM ET  Report Abuse

    • Overall: 3/5

    I agree with the points made by fundamental_technician. Actually outstanding points not even discussed in the article or the esteemed economist. Child seats keep the child restrained so he or she does not free him or herself from the traditional seatbelt...As far as teen vs. elderly drivers is concerned, I'm much more afraid of teen and adult drivers. Who's more dangerous: An old person driving 20 mph below the speed limit and not using his signal or an adult driving 20 mph above the speed limit, talking on a cellphone or driving drunk? The people who have a problem with elderly drivers can't deal with people driving at below the speed limit.

  • Yahoo! Finance User - Wednesday, January 9, 2008, 10:45PM ET  Report Abuse

    • Overall: 5/5

    That's dumb, if they cost "society" so much then the insurance companies should change how they reimburse based on whether or not accident victims were wearing a helmet. Your "social compact" is no reason to take away a person's rights. I should have every right to hurt myself as long as it doesn't put others in danger and I pay for it. Anyway, the great thing about this article is it's different - fine, it doesn't have anything to do with personal finance, but this was a lot more fun to read than Robert Kiyosaki telling me to buy gold or any of the other Yahoo's telling me that the key to riches is diligent savings over and over and over (don't get me wrong, the message needs pounding in, this was just a great break from that).

  • Yahoo! Finance User - Wednesday, January 9, 2008, 10:05PM ET  Report Abuse

    • Overall: 4/5

    The helmetless motorcyclist who crashes costs society a lot in emergency room costs, ICU costs, and lengthy rehab and disability. Until the helmetless sign away their organs AND their rights to all this medical care, society has a right to require they wear helmets. That's called the "social compact."

  • looneytarian - Wednesday, January 9, 2008, 8:37PM ET  Report Abuse

    • Overall: 5/5

    Great article! Overall, it points out that public policies affect the economy. Keep your eyes and ears open, get informed as to what policies are going to take place and then you have to have the brains to figure out how it is going to impact various industries or economic sectors. This should provide indicators of what to invest in or divest yourself of. To the reader not sure about the facts about the number of teenagers that die each year - according to Road and Track, in a 10 year period between 95 and 04, just over 11,000 teenage DRIVERs were killed, so if CW was talking about drivers, then his statistic fits when rounded down. If you take into account passengers, then the number killed per year is no doubt higher. What's with the idiots commenting about Libertarian or right wing propaganda? It is about SOME of the conclusions on topics discussed by the AEA (whose Board of Editors entirely consists of entities from universities from across the country). I am guessing that those are posted by frigging socialist liberals who want the government to nationalize everything so they wont have to wipe their own a**es!

  • Yahoo! Finance User - Wednesday, January 9, 2008, 8:05PM ET  Report Abuse

    • Overall: 5/5

    Interesting subject matter and well-summarized, but I have a question for each finding: 1) "Fundamental technician" has an excellent point about kids more likely to stay buckled if in seats. What I wonder is, if kid seats are more likely to be put in back, how many kids bake to death after their parents park and forget about them? Or are these incidents overcovered by Faux News, etc. like kidnappings are? Parents, which is more distracting, a car-seat kid next to you in the front or a car-seat kid in the back? )I ask because I don't know.) 2) If a teen can't drive, that means someone else (like a parent or older teen) has to cover twice as much distance in order to pick him up and then drive back. If a teen is less than twice-as-likely to have an accident versus a parent (or whoever else is the chaueffer), the graduated license policy might cost more accidents (and certainly more gas!). 3) As per the study's author, a helmet law might cost more lives in that people who die of head injuries make great organ donors. The lack of such a law is a big help here in Iowa. 4) How was the elderly-driver rate determined? Was it per capita or per-mile? Even if licensed, perhaps old people don't drive as much? There is also the same issue as with graduated licenses (see #2). Did the authors address these issues?

  • Yahoo! Finance User - Wednesday, January 9, 2008, 7:21PM ET  Report Abuse

    • Overall: 3/5

    About time there was a study on child car seats. Since they are so often installed wrong, and because they create such fusses, it'd be nice if there was some regulatory changes. I disagree with the point that "motorcyclists are most likely to harm themselves. Therefore, the fact that helmets save lives doesn't necessarily justify laws requiring that motorcyclists wear them." A similar point was made about older drivers. Helmetless and reactionless drivers may mostly harm themselves, but others' vehicle insurance bills are affected greatly when their bumbling leads to a non-fatal collision...and the medical bills are picked up by insurance or by taxpayers...to say nothing about the traffic jams that are caused. Mile for mile, I fear the 88 year old behind me more than the 18 year old.

  • Yahoo! Finance User - Wednesday, January 9, 2008, 7:09PM ET  Report Abuse

    • Overall: 5/5

    VERY NICE!!!

  • Jo - Wednesday, January 9, 2008, 6:59PM ET  Report Abuse

    • Overall: 4/5

    An excellent article! It is always good to hear contrarian ideas backed up with stats. He shows that our perceptions of risk are not always based on fact. This viewpoint could be applied to investing too. Conventional wisdom might say an investment is safe when it is not such as the colateralized mortgage problems that we see now or it might say that an invest ment is risky when it is not similar to what Michael Milken hypthesized about junk bonds in the eighties. Thanks for the insights.

  • Neal - Wednesday, January 9, 2008, 6:25PM ET  Report Abuse

    • Overall: 2/5

    You still stink, get a real Job roflmao

  • Yahoo! Finance User - Wednesday, January 9, 2008, 6:15PM ET  Report Abuse

    • Overall: 4/5

    A little problem on the facts. If there are over 40000 auto fatalities, how come only over a 1000 of these are teens?

  • Louis C - Wednesday, January 9, 2008, 6:02PM ET  Report Abuse

    • Overall: 3/5

    I am not sure this agrees with the data on older drivers given in the book Traffic Safety by Leonard Evans at ScienceServing Society.com. For example data there shows that renewing for another year the license of an 80-year-old-man imposes A.: 30% less risk on others than renewing license lof a 45 year old man and B: 62% less risk on others than renewing license of a 20-year old man. This is for single-vehicle crashes in which pedestrians were killed to measure the risk drivers impose on other road users.Interestingly the latest nhtsa data shows that for people over 65; 34% are fatalities when restraint not used as compared to 66% fatalities when restraint was used. This has been said to be due to the larger number of side collisions in the older age group where the restraint is not helpful.

  • Ergo - Wednesday, January 9, 2008, 5:40PM ET  Report Abuse

    • Overall: 4/5

    Difference between a motorcycle crash with helmet and without is open casket funeral vs closed casket... from an Emergency Room doctor.

  • Yahoo! Finance User - Wednesday, January 9, 2008, 4:26PM ET  Report Abuse

    • Overall: 5/5

    Economics delivered with humor.  Refreshing.

  • Douglas - Wednesday, January 9, 2008, 4:16PM ET  Report Abuse

    • Overall: 5/5

    4 stars for the article 1 star for the second paragraph. Personally, I don't like anti-Darwin laws ... If someone is dumb enough to ride a motorcycle without a helmet then they deserve to be removed from the gene pool.

  • Allison - Wednesday, January 9, 2008, 4:12PM ET  Report Abuse

    • Overall: 5/5

    Interesting content delivered with a side of humor. Great job! And personal finance is "personal economics" you whiners!

  • Yahoo! Finance User - Wednesday, January 9, 2008, 4:04PM ET  Report Abuse

    • Overall: 5/5

    Interesting subject and well written. It is about time Yahoo found somebody sensible to write for their finance page!

  • Yahoo! Finance User - Wednesday, January 9, 2008, 3:58PM ET  Report Abuse

    • Overall: 1/5

    How foolish: "The libertarian in me feels compelled to point out that motorcyclists are most likely to harm themselves. Therefore, the fact that helmets save lives doesn't necessarily justify laws requiring that motorcyclists wear them. One of the study's authors suggested (in true economist fashion) that motorcycle riders should be exempt from helmet laws as long as they agree to be organ donors." That's the libertarian mistruth: they want freedom until they harm themselves: who pays for their reckless behavior? Insurnace companies (all participants) or the taxpayer because they don't have sufficient resources to care for the vegatable for 30 years.

  • Chris - Wednesday, January 9, 2008, 3:04PM ET  Report Abuse

    • Overall: 5/5

    Refreshing and interesting. Thanks!

  • am - Wednesday, January 9, 2008, 2:52PM ET  Report Abuse

    • Overall: 5/5

    I thought this was a terrific article, and I am a very tough grader of these columns (especially his). It's very interesting to look at seemingly mundane, everday activities through an economic perspective. I thought about writing more, but there are already some excellent posts here, such as DanielT & the one posted at 1:55 Jan 9.

  • Andy - Wednesday, January 9, 2008, 2:45PM ET  Report Abuse

    • Overall: 4/5

    not bad... the driving age should be raised and there should be a maximum driving age, or at least more testing of their awareness/skills/vision. I HATE being stuck behind an oblivious senior citizen

  • Yahoo! Finance User - Wednesday, January 9, 2008, 2:26PM ET  Report Abuse

    • Overall: 2/5

    This isn't as bad an article as Wheelan's usual garbage, but I agree with earlier comments that Wheelan is a shill for libertarian propaganda.

  • Yahoo! Finance User - Wednesday, January 9, 2008, 2:10PM ET  Report Abuse

    • Overall: 4/5

    These points apparently are what the author heard, so it sounds as if he reported the conference news in terms more easily understood by we laymen.

  • Yahoo! Finance User - Wednesday, January 9, 2008, 2:06PM ET  Report Abuse

    • Overall: 4/5

    An enjoyable and RELEVANT article. Good work. For those of you complaining, Daniel T hit it on the head (see below).

  • Yahoo! Finance User - Wednesday, January 9, 2008, 1:55PM ET  Report Abuse

    • Overall: 4/5

    Well done. I had heard that Levitt was going to present a "controversial" topic at the conference but wouldn't let anyone know wha it was beforehand. While the typical person confuses economics with finance, these types of analysis are more interesting, in my opinion. I wish he would have expounded more on the public policy implications of these findings. And to answer another poster's question - YES, the companies that make child safety seats definitely try to influence policy in this regard. They also put out "misinformation" campaigns in which they try to convince consumers with the force of "studies" that their children should be in car seats long past the time when they need be. These "studies" are a throwback to research tobacco companies used to conduct to determine the safety of their products. I guess since car seats are not killing people it's not exactly the same, but the bias of the research certainly is.

  • Yahoo! Finance User - Wednesday, January 9, 2008, 1:54PM ET  Report Abuse

    • Overall: 1/5

    Wheelan is one of those Looneytarian pseudo-intellectuals who thinks that everything will be perfect if we just let the rich do whatever the hell they want. Doesn't matter who suffers as long as the rich are protected.

Showing comments 6-35 of 52<< PreviousNext >>
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