Vehicle Safety Inspections
August 21, 2002
Over 60 million registered motor vehicles in 20 states are subject to mandatory periodic safety inspections. The economic argument for mandatory inspection relies on the idea that vehicle maintenance reduces the accident rate and therefore provides external benefits. However, a new study in the Southern Economic Journal suggests that this is not the case.
The study finds that:
- Inspections do not significantly decrease the number of old cars on the road.
- Moreover, inspections do not significantly increase the amount of revenue that repair companies earn.
Putting these two observations together, the researchers conclude that inspections do not improve the quality of vehicles on the road. If inspections did improve quality, then either old cars would be pulled off the road because of safety failures or people would need to spend more money on repairing their automobiles. Since neither occurs, inspections fail to reach their goal.
The authors suggest that oversight of inspectors is weak. A Washington Post investigation found that in a recent year, about 600 out of 4,300 inspection stations in Virginia issued no rejection stickers at all. Massachusetts officials claim that monitoring the inspection performance of licensed garages is prohibitively expensive. Additionally, other studies show that inspection stickers can be readily obtained on the black market for as little as $40.
Source: Marc Poitras and Daniel Sutter, "Policy Ineffectiveness or Offsetting Behavior? An Analysis of Vehicle Safety Inspections," Southern Economic Journal, April 2002.
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