Risk compensation

Risk compensation is a theory which suggests that people typically adjust their behavior in response to perceived levels of risk, becoming more careful where they sense greater risk and less careful if they feel more protected. This effect is usually small in comparison to the fundamental benefits of safety interventions, but it can reduce the overall benefits or even result in increased risks. For example, it has been observed that motorists drove closer to the vehicle in front when their vehicles were fitted with anti-lock brakes. There is also evidence that the risk compensation phenomenon could explain the failure of condom distribution programs to reverse HIV prevalence and that condoms may foster disinhibition, with people engaging in risky sex both with and without condoms. By contrast, shared space is an urban street design method which consciously aims to increase the level of perceived risk and uncertainty, with the intention of slowing traffic and reducing the number and seriousness of injuries.

Overview Risk compensation is related to the broader term behavioral adaptation, which includes all behavior changes in response to safety measures, whether compensatory or not. However, since researchers are primarily interested in the compensatory or negative adaptive behavior, the terms are sometimes used interchangeably. The more recent version emerged from road safety research after it was claimed that many interventions failed to achieve the expected level of benefits but has since been investigated in many other fields.

Peltzman effect The reduction of predicted benefit from regulations that intend to increase safety is sometimes referred to as the Peltzman effect in recognition of Sam Peltzman, a professor of economics at the University of Chicago Booth School of Business, who published "The Effects of Automobile Safety Regulation" in the Journal of Political Economy in 1975 in which he controversially suggested that "offsets (due to risk compensation) are virtually complete, so that regulation has not decreased highway deaths". Peltzman claimed to originate this theory in the 1970s but it was used to oppose the requirement of safety equipment on trains in the Nineteenth Century. A reanalysis of his original data found numerous errors and his model failed to predict fatality rates before regulation. According to Peltzman, regulation was at best useless, at worst counterproductive. Peltzman found that the level of risk compensation in response to highway safety regulations was complete in the original study. But "Peltzman's theory does not predict the magnitude of risk compensatory behaviour." Substantial further empirical work has found that the effect exists in many contexts but generally offsets less than half of the direct effect. In the U.S., motor vehicle fatalities per capita declined by more than half from the beginning of regulation in the 1960s through 2012. Vehicle safety standards accounted for most of the reduction, augmented by seat belt use laws, changes in the minimum drinking age, and reductions in teen driving. The Peltzman effect can also result in a redistributive effect where the consequences of risky behaviour are increasingly felt by innocent parties (see moral hazard). By way of example, if a risk-tolerant driver responds to driver-safety interventions, such as compulsory seat belts, crumple zones, anti-lock brakes, etc., by driving faster with less attention, then this can result in increases in injuries and deaths to pedestrians.

Risk homeostasis Risk homeostasis is a controversial hypothesis, initially proposed in 1982 by Gerald J. S. Wilde, a professor at Queen's University in Canada, which suggests that people maximise their benefit by comparing the expected costs and benefits of safer and riskier behaviour and which introduced the idea of the target level of risk. He proposed four constituents to a person's calculations relating to risk:

Expected benefits of risky behavior (e.g., gaining time by speeding, fighting boredom, increasing mobility) Expected costs of risky behavior (e.g., speeding tickets, car repairs, insurance surcharges) Expected benefits of safe behavior (e.g., insurance discounts for accident-free periods, enhancement of reputation for responsibility) Expected costs of safe behavior (e.g., using an uncomfortable seat belt, being called a coward by one's peers, time loss) Wilde noted that when Sweden changed from driving on the left to driving on the right in 1967, this was followed by a marked reduction in the traffic fatality rate for 18 months, after which the trend returned to its previous values. He suggested that drivers had responded to increased perceived danger by taking more care, only to revert to previous habits as they became accustomed to the new regime. A similar pattern was seen following Iceland's switch from left- to right-hand driving. In a Munich study, part of a fleet of taxicabs was equipped with anti-lock brakes (ABS), while the remainder had conventional brake systems. In other respects, the two types of cars were identical. The crash rates, studied over three years, were a little higher for the cabs with ABS, Wilde concluded that drivers of ABS-equipped cabs took more risks, assuming that ABS would take care of them; non-ABS drivers were said to drive more carefully since they could not rely on ABS in a dangerous situation. The idea of risk homeostasis is disputed. One author claimed that it received "little support", another suggested that it "commands about as much credence as the flat earth hypothesis", a third noted that the proposal did create considerable media attention: "What set the debate alight, rather like petrol on flames, was the proposition in 1982 that road users did not just adapt to perceptions of changing risk through compensatory behaviors, but that the process was a homeostatic one, producing overall equilibrium in safety-related outcomes". Others claimed that road fatality statistics, which have fallen considerably since the introduction of safety measures, do not support the theory.

Preventive measures To create preventive measures in order to make a certain activity safer, risk compensation and risk compensation behavior have to be mapped in order to evaluate whether the measures are effective. When measures create risk compensation, this might nullify the measures. Then the measures might not lead to fewer injuries or, in worst cases, enhance injuries.

Examples

Road transport

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