Did the Great Recession Keep Bad Drivers off the Road?

Abstract

Motorists’ fatalities and the fatality rate (roadway deaths per vehicle-mile traveled (VMT)) tend to decrease during recessions. Using a novel data set of individual drivers, we establish that recessions have differential impacts on driving behavior by decreasing the VMT of observably risky drivers, such as those over age 60, and by increasing the VMT of observably safer drivers. The compositional shift toward safer drivers associated with a one percentage point increase in unemployment would save nearly 5000 lives per year nationwide. This finding suggests that policymakers could generate large benefits by targeting new driver-assistance technology at vulnerable groups.

Publication
Journal of Risk and Uncertainty(52)
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Vikram Maheshri
Associate Professor of Economics

I am an applied microeconomist at the University of Houston. I study social interactions, especially in urban settings.