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what-is-the-opposite-of-a-moral-hazzard

Posted by: admin 15 years, 12 months ago
According to a recent study by researchers from my alma mater, the University of Virginia, the use of cameras to fine motorists who run red lights actually increases the number of accidents at those intersections. There are fewer T-bone collisions, but more rear-end collisions.

However, a federal study dug deeper and found that the red light cameras saved money - $28,000 to $50,000 annually for each intersection - because the collisions were less expensive. I would rather get rear-ended any day of the week, so I concur.

Perhaps there is another option: don't tell the motorists that the cameras are there. They would know that the city has them, but not necessarily which intersection. Perhaps a city could buy a limited number of movable cameras. This would minimize the "immoral hazard" or whatever you would call the opposite of a moral hazard.

Full article at the Washington Post

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