Tag Archives: the ‘Peltzman effect’

The ‘Peltzman effect’

In 1975, University of Chicago economist Samuel Peltzman first described the phenomenon of compensating behavior – often termed the ‘Peltzman effect’ or in epidemiology, “risk compensation” or “risk homeostasis.” In his classic analysis of automobile safety regulation,4 Peltzman argued that federally mandated improvements in U.S. automobile safety in the 1960s (e.g., seat belts for all […]