TY  - JOUR
PY  - 2010//
TI  - Incentive Mechanisms for Safe Driving: A Comparative Analysis with Dynamic Data
JO  - Review of economics and statistics
A1  - Dionne, Georges
A1  - Pinquet, Jean
A1  - Maurice, Mathieu
A1  - Vanasse, Charles
SP  - 218
EP  - 227
VL  - 93
IS  - 1
N2  - Road safety policies often use incentive mechanisms based on traffic violations to promote safe driving—for example, fines, experience rating, and point-record driver's licenses. We analyze the effectiveness of these mechanisms in promoting safe driving. We derive their theoretical properties with respect to contract time and accumulated demerit points. These properties are tested empirically with data from the Quebec public insurance plan. We find evidence of moral hazard, which means that drivers who accumulate demerit points become more careful because they are at risk of losing their license. An insurance rating scheme introduced in 1992 reduced the frequency of traffic violations by 15%. We use this result to derive monetary equivalents for traffic violations and license suspensions.<p />
LA  - 
SN  - 0034-6535
UR  - http://dx.doi.org/10.1162/REST_a_00054
ID  - ref1
ER  -