In 1975, economist Sam Peltzman published a study of the effects of recent safety regulations for automobiles. His results were surprising: Increased safety standards for automobiles had no measurable effect on passenger fatalities.
Pedestrian fatalities in automobile accidents, however, increased. (This is now known as the Peltzman effect and has been tested repeatedly over the decades.)
a. Why might more pedestrians be killed when a car has more safety features?
b. Economists have looked for ways out of Peltzman's dilemma. Here's one possible solution: Gordon Tullock, our colleague at George Mason, has argued that cars could have long spikes jutting out of the steering column pointed directly at the driver's heart.
Keeping Peltzman's paper and the role of incentives in mind, would you expect this safety mechanism to result in an increase, decrease, or no change in automobile accident fatalities? Why?
c. Would a pedestrian who never drives or rides in cars tend to favor Tullock's solution? Why or why not?