August 21, 2007
Paper Envy

Newmark has already blogged it, but a new paper on cell phone usage and driving is so clever that I'm posting part of the abstract:

We investigate the causal link between cellular usage and crash rates by exploiting a natural experiment induced by a popular feature of cell phone plans in recent years—the discontinuity in marginal pricing at 9 pm on weekdays when plans transition from “peak” to “off-peak” pricing. We first document a jump in call volume of about 20-30% at “peak” to “off-peak” switching times for two large samples of callers from 2000-2001 and 2005. Using a double difference estimator which uses the era prior to price switching as a control (as well as weekends as a second control), we find no evidence for a rise in crashes after 9 pm on weekdays from 2002-2005. The 95% CI of the estimates rules out any increase in all crashes larger than .9% and any increase larger than 2.4% for fatal crashes. These estimates are at odds with the crash risks implied by the existing research. We confirm our results with three additional empirical approaches—we compare trends in cell phone ownership and crashes across areas of contiguous economic activity over time, investigate whether differences in urban versus rural crash rates mirror identified gaps in urban-rural cellular ownership, and finally estimate the impact of legislation banning driver cell phone use on crash rates. None of the additional analyses produces evidence for a positive link between cellular use and vehicle crashes.

Posted by E. Frank Stephenson at 03:29 PM in Economics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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