Peltzman Effect
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Overview

This phenomenon can explain why football players wearing helmets can be more prone to neck injuries; why pedestrians are at greater risk when more drivers use seat belts and airbags; and the behavioural challenges we'll likely face as more of our world vaccinates against Covid. 

The Peltzman Effect describes how increasing safety measures will often lead people to take more risks, thus reducing the overall benefits of said safety measures. 

EXAMPLES.

The Peltzman Effect is a part of Risk Compensation theory, which examines people's tendency to change their behaviour based on perceived risks. This effect has been observed, or at least hypothesised, in a number of contexts including: 

  • The original study by Sam Peltzman in the automotive industry, with Peltzman finding that car safety measures increased safety for occupants but led to more bystander deaths because of unsafe driving as a result – see Origins and Limitations below for more. 

  • The observation that motorists drove closer to the cars in front of them when their own cars were fitted with anti-lock brakes. 

  • The limited initial impact of distributing condoms to reduce the spread of HIV. 

  • The introduction of four-wheel drive SUVs in the 1990s leading to an increase in snow-related accidents. 

  • One study reporting that wearing helmets in gridiron football actually increased head injuries because of players' false sense of security'. 

  • And finally, this effect was also attributed to investment markets with economist Hyman Minsky noting that “stability begets instability,” and that 'comfortable' investors will take greater risks.

See expanded examples in the In Practice section below. 

COVID IMPLICATIONS. 

There have been a range of studies looking at people’s tendency to be laxer with wearing masks and social distancing, when they are vaccinated and even in the period before they receive their shots. Similarly, people in areas which are being vaccinated tend to take more risks, making assumptions about the impact of herd immunity whether they are vaccinated or not. This shifted risk perception has led to changed behaviours and in some cases actual increases in infection rates. 

HOW TO USE THIS EFFECT.

The Peltzman Effect provides a reminder for careful messaging connected to safety initiatives. In respect to Covid, it means a delicate balance between stating that ‘vaccinations will make a difference’ and that ‘we are still not out of the woods.’ That said, knowledge of this effect alone, like other cognitive biases, will not necessarily prevent it. 

A more practical example of designing with the Peltzman Effect in mind can be seen through 'shared space' highway design that has been used in multiple countries, which involves removing curbs, road markings, and traffic signs to increase uncertainty and boost caution, leading to slower and more conscious driving. Such design techniques have critics, particularly advocates for deaf and blind people who are obviously negatively impacted by the lack of guides. 

IN YOUR LATTICEWORK. 

This effect can be understood in the context of Psychological Safety which has been shown to increase people’s ability to take risks, collaborate, and innovate. Combine this effect with the Risk Matrix to help interrupt it by visually showing risk and impact implications of changed behaviour. More broadly, this model plays into our general bounded rationality and an understanding of Fast and Slow Thinking.

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Actionable takeaways
  • Expect less immediate positive impacts for new safety measures. 

Understanding the Peltzman Effect means having a cautious outlook on projections for impacts of new safety measures. Such safety measures will typically assume that behaviour will remain constant, rather than people taking greater risks and potentially having more accidents/ impacts as a result. 

  • Message with the Peltzman Effect in mind. 

You can try to explain the Peltzman Effect, and manage expectations about risk and potential changed behaviours with new safety measures. However, even this is likely to have limited impact. 

  • Design with the Peltzman Effect in mind. 

Consider how you might counterintuitively design to increase perceived risk to actively encourage safer behaviour, even as you introduce underlying safety measures. 

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In Practice

Seat belts. 

This 1994 study of seat belt wearing explored behavioural adaptation by those starting to use seat belts and found that “beginning wearers (group iii) showed signs of continuing behavioral adaptation, in the form of increased speed and increased propensity for close following.”

Bike helmets. 

Cycling UK has argued against the compulsory use of helmets, explaining: “Cycle helmets have in any case not been shown to be an effective way to reduce cyclists’ injury risks. Indeed they might even be counter-productive, by encouraging drivers or cyclists to behave less cautiously, and/or by increasing the risks of neck and other injuries. By deterring people from cycling, they may also reduce the benefits that cyclists gain from ‘safety in numbers’.”

Booths Rule #2. 

Skydiving has become consistently safer over the last few decades thanks to a number of safety initiatives, some of them developed by skydiving enthusiast and inventor Bill Booth. However, Booth’s Rule #2 states, "the safer skydiving gear becomes, the more chances skydivers will take, in order to keep the fatality rate constant." Indeed, without the popularity of complex low to ground maneuvers and high speed canopies that allow for faster speeds, some claim that fatalities would be a fraction of what they were a few decades ago.

Limitations

Peltzman’s work was critiqued in a paper two years after its publication. Leon Robertson’s paper entitled A Critical Analysis of Peltzman’s ‘The Effects of Automobile Safety Regulation broke down a number of statistical problems with Peltzman’s work, explaining that: “The variables used in Peltzman's analysis were reviewed. It was concluded that some of them were arbitrarily chosen, that some were correlated, and that important factors were omitted. This may cause spurious and biased correlations. Peltzman's time series regression equations were reconstructed and found unstable, which makes them useless for predictions which are one basis for Peltzman's conclusions.” For those of you unfamiliar with academic discourse, them’s fighting words!

That said, the principle behind Peltzman’s work has persisted and evidence seems to demonstrate the effect does occur but generally does not negate all benefits of safety initiatives. A 2006 Dutch paper conducted an empirical study of motor vehicle safety and found that behaviour change related to the Peltzman Effect reduced less than 50% of the overall benefits. 

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Origins & Resources

Sam Peltzman, an economist at the University of Chicago, first described this effect in 1975 in relation to the car safety entitled The Effects of Automobile Safety Regulation. In the study, he argued that the increase of safety regulations was offset by people’s behaviour creating no change in highway deaths. The results of his report have been criticised (see Limitations above), though the effect named after the work persists. 

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