The Demand for Reckless Driving

 From Steven Landsburg's "Price Theory and Applications".

I have added a corollary after Landsburg's comment. 

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Reckless driving is another good that people choose to “consume.” For this consumption
they pay a price, partly by risking death in an accident. When that price is reduced—say,
by the installation of safety equipment in cars—we should expect the quantity of reckless
driving to increase.

This implies that safety devices like air bags could lead to either an increase or a
decrease in the number of driver deaths. With an air bag, an individual accident is less
likely to be fatal. But for exactly that reason, people will drive more recklessly and therefore
will have more accidents. Whether the number of driver deaths decreases, increases,
or remains constant depends on the size of that response; in other words, it depends on
whether the demand curve for reckless driving is steep or flat.

When Professors Steven Peterson, George Hoffer, and Edward Millner investigated
this question,4 they found that air bags had almost no effect on the number of driver
deaths; in fact, if anything, giving a driver an air bag makes him slightly more likely to die
in an accident. With the air bag, the driver chooses to engage in enough additional reckless
driving to completely offset the safety advantages of the air bag itself.

Does that mean drivers don’t benefit from air bags? No, it just means they choose to
take their benefits in a form other than safety. They get to drive faster, more aggressively,
and more recklessly with only a slight increase in their chance of being killed. The real losers
are pedestrians and other drivers, who participate in the additional accidents without
sharing the safety features of the air bag.

If you find these results difficult to believe, try this experiment. Pick ten friends and
read sentence 1 to five of them and sentence 2 to the other five:

1. “If you give a driver an air bag, he’ll drive more recklessly.”

2. “If you take away a driver’s air bag, he’ll drive more carefully.”

Chances are, the five friends who hear sentence 1 will find it implausible and the five who
hear sentence 2 will find it obvious. But the two sentences say exactly the same thing in
different words, so your friends’ instincts can’t all be right. The instinct to disbelieve sentence
1 is an interesting fact about psychology; the fact that the sentence is nevertheless
true is an interesting fact about economics.

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Corrollary: If you want to reduce reckless driving, simply make cars with a sharp spike sticking out from the center of the steering wheel - pointed at the driver.