Peltzman Effect

From Open Risk Manual

Definition

The Peltzman Effect (also Risk Compensation) denotes a behavioral response in which risk management measures or regulation mandating risk reduction may have the unintended consequence of encouraging riskier behavior as people feel safer.

Background

The effect has been highlighted by Peltzman in the context of safety belt regulation[1]

Issues and Challenges

  • It is generally difficut to isolate the impact of this behavior from other confounding factors

See Also

References

  1. Peltzman, S., 1975, “The Effects of Automobile Safety Regulation,” Journal of Political Economy, 83, 677–725

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