Regulatory Protective Measures and Risky Behavior: Should We Be Saved from Ourselves? | 2014
Joint with Alberto Chong
Forthcoming, Journal of Public Economics
We provide evidence of the Peltzman effect, which predicts that individuals who are required to wear protective gear offset the benefits by taking additional risks. The Ice Hockey visor is a protective devise whose use is mandatory in some leagues and not in others. We compare players who always wear a visor with players who only wear one when required to. Due to differences in league regulations, as the latter group of players change leagues their use of the visor changes too, which allow us to estimate the effect of mandatory visor use on behavior. We find that mandatory visors substantially increase risky behavior. Due to their risky and aggressive behavior on the ice rink, players obliged to wear a visor are penalized 0.18 additional minutes per game. This is a large effect. In our sample the average number of penalty minutes per player per game is 0.8. The estimated effects are not driven by characteristics of players, playing style, or differences in the penalization standards of different leagues.