Cameron Murray is a blogger that many of the MacroBusiness readers may have read previously. He has a blog called Observations of an Environmental Economist which I followed until Cameron announced his retirement from blogging last year. I have always enjoyed his blog because it presents some refreshing views on a number of topics and I always appreciate “new” thinking about old ideas.
Recently Cameron has popped up a bit on MacroBusiness and also seems to be creeping back into blogging. So today, with the blessing of Cameron I thought I would re-produce one of his latest posts for our readers enjoyment.
There is an odd coexistence between two conflicting safety policies that may well be pursued by the same accident prevention agency. The first seeks to improve safety by alleviating the consequences of risky behaviour. It may take the form of seat belt installation and wearing, airbags, crashworthy vehicle design, or forgiving roads (collapsible lamp posts and barriers). This policy offers forgiveness for a moment of inattention or carelessness. The second policy seeks to improve safety by making the consequences of imprudent behaviour more severe and includes things such as speed bumps, narrow street passages, and fines for violations. Here, people are threatened into adopting a safe behaviour; a moment of inattention or carelessness may have a dire outcome.
While these two policies seem logically contradictory, neither is likely to reduce the injury rate, because people adapt their behaviour to changes in environmental conditions. Both theory and data indicate that safety and lifestyle dependent health is unlikely to improve unless the amount of risk people are willing to take is reduced. (here – my emphasis)
The above passage points out a common logical absurdity, and contains an important lesson for Australian’s with and overeager obsession of controlling personal choices through ‘nanny state’ regulations. More on the nanny state a little later.
First, it is important to examine the hypothesis of risk homeostasis to properly understand the implication of the opening quote, since it claims that neither of the two contradictory policies aimed towards improving safety are effective.
The essential argument of risk homeostasis is that humans have an inbuilt level or risk that they gravitate towards in response to their external environment. If we reduce the risk of an activity, people will compensate by finding other risky activities as a replacement, or undertaking the activity in a more extreme manner. For example, if we ban smoking tobacco, which doesn’t seem like such a remote possibility, do we really expect smokers to replace their habit with fruit snacks and yoga? Or might they compensate by increasing their alcohol consumption or perhaps smoking dope instead.
Risk homeostasis is not to be confused with risk compensation, which suggests that individuals will behave less cautiously in situations where they feel “safer” or more protected, but that we don’t necessary return to a predetermined risk equilibrium point.
Improving transport safety is an area where there is strong evidence risk compensation, and indeed of risk homeostasis.
One reason I am against mandatory bicycle helmets is due to the increased dangers posed by this perception of safety. Not only do cyclists tend to behave more aggressively, but helmet wearing changes the behaviour of other road users. It decreases the rate of cycling, and the effect of fewer cyclists on the road is to increase the danger of the remaining cyclist, but it also makes vehicle drivers act more carelessly around cyclists.
Of course this behaviour is all based on perceptions. Helmets themselves provide minimal protection in a limited number of head collisions, and can exacerbate brain injury for some other types of collisions where helmets can increase rotational acceleration during a collision.
The best experimental evidence of risk homeostasis is the famous Munich Taxi-cab experiment, where for three years half the taxi cabs in a fleet had ABS brakes and the other half didn’t, and various monitoring and testing took place including fitting all vehicles with accelerometers.
Among a total of 747 accidents incurred by the company’s taxis during that period, the involvement rate of the ABS vehicles was not lower, but slightly higher, although not significantly so in a statistical sense. These vehicles were somewhat under-represented in the sub-category of accidents in which the cab driver was judged to be culpable, but clearly over-represented in accidents in which the driver was not at fault. Accident severity was independent of the presence or absence of ABS.
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Subsequent analysis of the rating scales showed that drivers of cabs with ABS made sharper turns in curves, were less accurate in their lane-holding behaviour, proceeded at a shorter forward sight distance, made more poorly adjusted merging manoeuvres and created more “traffic conflicts”. This is a technical term for a situation in which one or more traffic participants have to take swift action to avoid a collision with another road user. Finally, as compared with the non-ABS cabs, the ABS cabs were driven faster at one of the four measuring points along the route. All these differences were significant.
To put this experiment in the context of our original two options for reducing risk, ABS brakes are an example of an action that reduces the consequences of risky behaviour. Hence such actions decrease total risk. But the study did not end there, and finds some evidence that the opposite type of strategy, increasing the consequences of risk taking, has quite an effect.
In a further extension of their study, the researchers analysed the accidents recorded by the same taxi company during an additional year. No difference in accident or severity rate between ABS and non-ABS vehicles was observed, but ABS taxis had more accidents under slippery driving conditions than the comparison vehicles. A major drop, however, in the overall accident rate occurred in the fourth year as compared with the earlier three-year period. The researchers attributed this to the fact that the taxi company, in an effort to reduce the accident rate, had made the drivers responsible for paying part of the costs of vehicle repairs, and threatened them with dismissal if they accumulated a particularly bad accident record.
My favourite example of different effects of increasing consequences of risk taking versus decreasing the consequences is here.
Sometimes, students would deny that they drive more recklessly when wearing a seatbelt. Tullock liked to illustrate the idea of offsetting behaviour for them by asking what they’d do if a large spike extended from the steering wheel and pointed directly at their heart. Wearing a seatbelt is a mild form of that effect, but in reverse. Tullock’s students came to call the thing the “Tullock Spike”.
Australian policy makers could learn some lessons from risk homeostasis. For any returning Aussie from time abroad the degree of over-regulation can be a shock. One friend recently returned from three years in Paris and said that it was the one thing that enraged them the most about coming home. Think about it. We can’t buy alcohol at the supermarket, nor drink it in a public place, nor smoke in a building even if the owner is trying to run a cigar smoking cafe. In fact the body corporate of an apartment building recently passed a by-law to stop people smoking in their own homes!
With the recent surge in anti-smoking opinion, not only will smokers pay ridiculous taxes, cigarette producers will need to adorn their prized products with pictures of diseased organs, but not their own brand label. Luckily, alcohol is exempt from such measures which might make the Chinese communist party blush, yet arguable alcohol is a far greater public health concern.
We can’t buy fireworks or ride without a helmet. There are now calls to ban topless bathing on NSW beaches and there is the infamous internet filter proposed my communications minister Conroy. Oh, I almost forgot the proposal to ban teachers from using red pens when marking because red is an aggressive colour!
We can’t be expected to navigate construction zones on the street without 17 different warning signs, stop-go lollipop ladies, flashing lights and orange fencing, nor, it seems, are we expected to navigate over treacherous cracks in footpaths, with councils often paying compensation to ‘victims’ of such treachery. We have the slowest speed limits yet many would say the worst drivers.
Policy makers must believe the average Australian has both multiple personality disorder and signs of schizophrenia. Someone who can perfectly judge their own financial risk when taking on massive debt, can choose their own career, raise their own children, run their own businesses and judge the associated risks, yet when it comes to the basics of life, like having a beer, tanning your breasts, or navigating the street, we all become complete morons incapable of rational behaviour.
I have no problems with governments intervening to protect people for the actions of others, but they should be make their own choices about their personal safety. The strongest argument in favour of this position is the theory of risk homeostasis. It seems we really can’t save people from themselves. In fact the parent in me suggests that all this molly-coddling decreases our ability to judge real risks when they arise.