New Evidence on the Casual Effect of Traffic safety Laws on Drunk Driving and Traffic Fatalities

In the United States, about 28 lives are lost daily in motor vehicle accidents that involve an alcohol-impaired driver. The conventional wisdom is that these accidents can be prevented through the use of strict traffic laws that are robustly enforced, though no consensus exists on the causal impact of these laws in reducing motor vehicle-related fatalities. This paper exploits quasi-random variation in state-level driving and road safety restrictions to estimate the causal effect of select traffic laws on the number of fatal accidents and fatal accidents involving a drunk driver. In this paper, we employ the contiguous-border county-pair approach. This is causally identified from the discontinuities in policy treatments among homogeneous contiguous counties that are separated by a shared state border. This approach addresses the econometric issues created due to spatial heterogeneity that may have biased several studies in the literature. The analysis reveals that the laws related to accident prevention, such as having a good graduated licensing system, pigovian beer taxes and primary seatbelt enforcement, are the most effective in reducing motor vehicle-related fatalities. Using these estimated coefficients, simple simulations suggest that policymakers have been utilizing existing traffic laws sub-optimally, saving only 17% of the lives lost to motor vehicle crashes.