Lucija Muehlenbachs (University of Calgary) on "External Cost of Trucking: Evidence from Shale Gas and Traffic Accidents"

Lucija Muehlenbachs (University of Calgary) on
Speaker:  Lucija Muehlenbachs - University of Calgary
  Wednesday, June 7, 2017 at 12:30 PM Polo Santa Marta, Via Cantarane 24, Room 1.59
How much risk does a heavy truck impose on highway safety, and is this risk covered by current liability regimes in the U.S.?  To answer these questions, we exploit the rapid influx of heavy trucks during the shale gas boom in Pennsylvania.  Using quasi-experimental variation in truck traffic flows we isolate the impact of trucks from boomtown effects.
We compare the implied damages from a truck accident to the minimum liability coverage that is currently required for trucking.  Although debated by policymakers, these limits have remained the same for the last 30 years.  Furthermore, the cost burden of truck accidents might be felt beyond those directly involved if car insurance premiums increase for everyone living in the vicinity.  Indeed this appears to be the case for zip codes with heavy shale gas drilling.  Examining car insurance premiums offered to the same representative individual across different zip codes and years, we find that the insurance rate for a new enrollee is higher in zip codes after drilling.  

Programme Director
Marcella Veronesi

Publication date
February 23, 2017

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