Freeman

BOOK REVIEW

Risk

Risk-Compensating Behaviors Offset Intended Safety Benefits

FEBRUARY 01, 1996 by JOHN SEMMENS

Who should decide how much risk you should take? Proponents of government safety regulation think that the government has the expertise to decide this issue for you. Professor John Adams of University College London presents a case for more individual autonomy.

While the government may have the manpower and the budget to commission numerous studies, tests, and experiments aimed at discovering what is safe, the fact is, it lacks the information most crucial to making an appropriate choice of risks. The information it lacks is each individual’s highly subjective assessment of the risk/reward trade-off.

Life cannot be made risk-free. Every action bears some element of risk. Even inaction carries some risk. Whether any particular course of action is worth the risk that must be incurred to carry it out can only be determined by the individual who must bear the consequences, good or bad, of the action.

That not everyone places the same weight on the prospective risks and rewards of a given action should be obvious. Consider some examples. The U.S. Navy, for instance, offers a “hazardous duty” bonus for those recruits willing to take flying assignments. Not all recruits choose to pursue flying. On the other hand, skydivers voluntarily incur expenses to pay for the privilege of experiencing the danger of jumping out of an airplane. Others fear to fly on even the safest of commercial airlines.

Given the varied preferences people have for the amount of risk they are willing to tolerate, it would seem that government-mandated safety devices are bound to violate the wishes of many individuals. Proponents of government safety mandates presume that “erring on the side of greater safety” excuses the inability to satisfy the varied preferences of different individuals. However, erring on the side of greater safety is easier said than done. Because people are not automatons, they cannot be counted on to passively accept government decisions on safety issues.

The idea that individuals attempt to balance risks and rewards is the foundation of the theory of “risk compensation.” Risk compensation theory says that each individual has his own internal risk “thermostat.” When perceived risk is higher than what ‘the individual finds comfortable, he is apt to take risk-reducing actions. When perceived risk is lower than what the individual finds comfortable, he is apt to take more chances in pursuit of other objectives.

If government attempts to force more safety onto individuals than they would freely choose for themselves, some of them will try to convert the unneeded safety margin into an increased performance level. In the field of traffic safety, where government has been actively working to compel drivers to purchase and use more safety devices (for example, air bags and seat belts), there is a danger that some better protected drivers will try to convert this intended safety enhancement into a performance gain by driving faster or more aggressively. Dr. Adams presents evidence from a Dutch study in which it was found that persons who did not normally wear seat belts tended to drive faster and follow the vehicles ahead of them more closely in traffic when required to wear a seat belt.

More aggressive driving effectively shifts risk from protected drivers to others who may or may not be protected. The net result may be no reduction in traffic fatality rates, but merely a different assortment of victims. Dr. Adams presents evidence to indicate that despite predictions of dramatic declines in traffic fatalities that were supposed to follow the imposition of mandatory seat belt laws, there is no convincing proof that there has been any reduction. In a comparison of nations with and without mandatory seat belt laws, Dr. Adams discovered that those without these laws had a slightly larger decline in traffic fatality rates over the same time period.

It is apparent that risk compensating behaviors are offsetting the intended safety benefits that the government is trying to force on society. This is especially troubling when one considers how the risk may be redistributed. Dr. Adams has found data indicating that the decline in driver deaths is being offset by increases in deaths among non-driving vehicle occupants, pedestrians, and bicyclists. The driver is the one person with the most influence on whether a vehicle will crash. Making this person feel safer does not make the traffic environment safer. The fact that some of the non-driving victims of a government-induced shift of risk are children is a perverse unintended consequence.

A more humble role for government may be in order. Enforcing laws against crimes and holding people responsible for the damage they do to others may be enough of a burden for the government to undertake in the pursuit of public safety. In most respects, individuals would seem to be best served by being left free to make their own choices on how to balance the risks and rewards of everyday life.

Mr. Semmens is an economist with Laissez-Faire Institute in Chandler, Arizona.

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February 1996

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