Internalizing Peltzman

Dr. Sam Peltzman, Professor of EconomicsDr. Sam Peltzman, a renowned professor of economics from the University of Chicago Business School, espoused a hypothesis which became known as the Peltzman Effect. It dealt with the unintended, negative, and contrariwise effects of safety regulations.

Distilled down to its simplest terms the Peltzman Effect is a theory that claims that the safer people believe they are the more likely they are to engage in risky behavior.

Dr. Peltzman is certainly no crackpot and the Peltzman Effect has been discussed by experts in a variety of fields for years, though the public at large may have remained unaware of it.

The Peltzman Effect is the hypothesized tendency of people to react to a safety regulation by increasing other risky behavior, offsetting some or all of the benefit of the regulation.

— Paul G. Specht
Journal of SH&E Research, Volume 4, Number 3 (2007)

I think this rather prosaic phenomenon is one that Conservatives had long ago internalized, whereas Liberals have yet to grasp it. This causes a fundamental chasm between how the two groups view government involvement in people’s lives.

Dr. Peltzman’s rhetoric on the topic focuses on willful contrarian or reactionary risk taking. This I disagree with. I think the results are largely caused by subconscious false security instead.

It truly simple; every “safety net” that is emplaced results in people feeling more secure, often overly so, and results in them taking greater risks. AIDS relief, TARP’s “Too Big To Fail,” the Auto Bailouts, repeated extensions of unemployment benefits, ObamaCare, Union labor contracts, gated communities, and Peltzman’s favorite, seatbelts & airbags – they all result in the same thing, a reduction in perceived personal risk. They also all result in the unintended secondary or follow-on effect of increased risky behavior by those “protected” by such things.

Sadly, Liberals haven’t internalized Peltzman’s hypothesis and keep expecting regulation of people’s behavior to have positive results in the long run.

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