Strategic Responses to Vehicle Size and Implications in an Arms Race  

Tuesday, January 30, 2018 at 12:00pm

This is a past event.

Lewis Hall (RGL), 103
650 Childs Way, Los Angeles, CA 90089

Jonathan B. Scott

Tuesday, January 30 at 12p in RGL 103

 

 

Abstract: I analyze a vehicle arms race—where preferences for safety lead to strategic purchases of large vehicles—as a potential contributing factor to the rise in vehicle sizes in the U.S. To identify consumer behavior consistent with an arms race, I exploit quasi-random next-door neighbor fatalities in fatal car accidents to examine how shifts in preferences for safety impact demand for heavy vehicles. I find that households neighboring an individual who dies in an accident respond by purchasing significantly larger and safer vehicles than households neighboring someone who survives an accident. Following robust quasi-experimental evidence, I estimate a discrete choice model of vehicle purchases allowing for consumer preferences on relative weight. My specification allows preferences for vehicle size to vary based on the size of cars in the households’ area. Counterfactual simulations illustrate that an arms race can be reversed with a sufficiently high Pigouvian tax, which will depend on the distribution of vehicle weights, specific to the area.

 

Bio: Jonathan Scott is a fifth year PhD candidate in Economics at Texas A&M University. His research interests span industrial organization and public economics, and primarily deal with issues related to energy and the environment. His recent research has focused on a range of topics in energy and environmental economics--from hydraulic fracturing to climate change, and transportation. He implements his research using both reduced-form and structural methods to identify credible, causal relationships.

Sponsored by:

Solutions Lab for a Sustainable and Equitable Future

 

Event Type

Lecture / Talk / Workshop

Audience

Students, Faculty/Staff

Campus

University Park Campus

Cost

Free

Department
Price School of Public Policy
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