tag:blogger.com,1999:blog-2830084253401570472.post9061995891654101630..comments2024-03-28T09:22:36.967+13:00Comments on Offsetting Behaviour: Correcting the BERL report part 2: Lost outputEric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2830084253401570472.post-87435208553810303922009-06-23T15:55:48.264+12:002009-06-23T15:55:48.264+12:00I would imagine that the kind of person who is dri...I would imagine that the kind of person who is drinking to the point of serious harm isn't very likely to be the kind of person who takes out a life insurance policy, irrational as that may be. <br /><br />And I agree, that there are lots of other policy interventions such as you list that would probably be effective in reducing drink-driving deaths. I just think that maybe only noting strictly external costs perhaps over-simplifies the 'very complicated equilibrium'. Afterall, a net external social cost of $146.3 million isn't a terribly strong case for policy intervention at all in the grand scheme of things it seems to me.Unknownhttps://www.blogger.com/profile/17758146592963725884noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-48731961812842345152009-06-23T15:17:35.253+12:002009-06-23T15:17:35.253+12:00Not a silly question. Actually, it's a pretty...Not a silly question. Actually, it's a pretty tough one. My first answer is that life insurance solves it. For example, my wife won't allow me to have a motorbike unless I substantially increase my life insurance policy: she wants extra compensation if I die for a stupid reason. My second answer is that once we start allowing welfare considerations of intrafamily externalities that second-guess the bargains made within households, things get very murky very quickly. There are all kinds of margins on which couples impose costs on each other; this is all part of a very complicated equilibrium. <br /><br />That said, there are all kinds of things government can and should be doing to reduce deaths from drink driving besides raising alcohol taxes (very indirect, not terribly effective, imposes large costs on moderate drinkers) or lowering the drink-driving limit (does nothing to deter the folks who already are driving drunk at current limits and who currently are not deterred). Some off-the-cuff potential starters: mandatory third party insurance, having ACC not cover losses to drink drivers, car confiscation for drink drivers who go on to drive while suspended, more blitzes in areas where there's a high probability of catching drink drivers rather than just random draw, mandatory ignition interlocks (breath testers) for convicted drink-drivers' cars for a reasonable period of time post conviction....Eric Cramptonhttps://www.blogger.com/profile/15831696523324469713noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-57620021550783950352009-06-23T13:46:15.457+12:002009-06-23T13:46:15.457+12:00This may be a silly question, but here goes: You s...This may be a silly question, but here goes: You say that 'If a drink-driver kills only himself in a single-vehicle accident, his lost future income is a cost to himself.' Isn't it also a cost to others, such as the dead person's dependents, so therefore not a purely internal cost?<br /><br />CatherineUnknownhttps://www.blogger.com/profile/17758146592963725884noreply@blogger.com