The Privatization of Roads and Highways - Ludwig von Mises Institute

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Road Socialism 189 indicates that vehicle inspection in New Jersey reduces highway fatalities by 304 deaths per year. This result is obtained when other changes that also might affect fatalities are taken into account in the analysis. 11 And indeed they are thorough in taking into account numerous other such variables. These include the number of motor vehicle registrations, number of drivers licensed, vehicle mileage, personal income, number of drunk driving revocations, population and gasoline consumption. All in all, a very careful job of eliminating alternative hypotheses to their own, except for one small detail, the one analyzed in this chapter. Loeb is even more specific about the possible exclusion of variables. He singles out Sommers in this regard, charging that “if the model used by Sommers omits an important variable, biased estimates may result for the coefficients of the remaining variables.” 12 And what are the specifics? Loeb uses “personal income, education, fuel consumption, density of population, precipitation, highway mileage, consumption of distilled spirits, and the age composition of the population.” 13 But this is surely a case of the pot calling the kettle black, for Loeb himself omits an important variable, with a causal effect potentially greater than all of the variables he cites put together, 14 if only because this one is responsible for affecting (virtually all of) the others. 11Ibid., p. 162; emphasis added. 12P.D. Loeb, “The Determinants of Motor Vehicle Accidents with Special Consideration to Policy Variables,” Journal of Transport Economics and Policy 21 (September 1985): 279. 13Paul Sommers, “Drinking Age and the 55 MPH Speed Limit,” Atlantic Economic Journal 13 (March 1985): 43, mentions “public concern over the staggering number of deaths and injuries caused each year by drunken drivers and speed violators,” a paradigm case of the confusion between proximate and underlying causes. 14Loeb, “The Determinants of Motor Vehicle Accidents with Special Consideration to Policy Variables,” pp. 279–87.
190 The Privatization of Roads and Highways Loeb again worries about the “omission of variables.” 15 This time he employs “specification error tests” in an attempt to root out this scourge. Again he criticizes Sommers, asserting that, in contrast to that author, his “models do not omit the potentially important socio-economic and driving-related variables as in Sommers’ work.” 16 Needless to say, he is again guilty of the same error, since he omits the crucial “socio-economic” variable of public or private-sector ownership, management and control. 17 As for his “specification error tests,” they employ the usual litany of drinking age, 18 alcohol consumption, speed, 19 15 P.D. Loeb, “The Determinants of Motor Vehicle Accidents—A Specification Error Analysis,” Logistics and Transportation Review 24 (March 1988): 33. 16 Ibid., p. 34. 17Donald Snyder, “Speeding, Coordination and the 55-MPH Limit: Comment,” American Economic Review 79, no. 4 (September 1989): 922, also discusses the issue of omitted variables in the same unsatisfactory manner. 18Loeb, “The Determinants of Motor Vehicle Accidents—A Specification Error Analysis,” p. 40. Other studies which focus on this variable include P.J. Cook and G. Tauchen, “The Effect of Minimum Drinking Age Legislation on Youthful Auto Fatalities, 1970–1977,” Journal of Legal Studies 13 (1984): 169–90; P. Asch and D.T. Levy, “Does the Minimum Drinking Age Affect Traffic Fatalities?,” Journal of Policy Analysis and Management 6 (Winter, 1987); Williams, et al., “The Minimum Drinking Age and Fatal Motor Vehicle Crashes,” Journal of Legal Studies 4 (1975): 219; idem, “The Effect of Raising the Minimum Drinking Age on Involvement in Fatal Crashes,” Journal of Legal Studies 12 (1983): 169. 19Other studies which focus on speed include Dana Kamerud, “The 55 MPH.Speed Limit: Costs, Benefits and Implied Tradeoffs,” Transportation Research 17A (January 1983): 51–64; Gilbert Castle, “The 55 MPH Speed Limit: A Cost-Benefit Analysis,” Traffic Engineering 45 (January 1976); L. Egmose and T. Egmose, “Speed Limits Save Lives,” Journal of Traffic Medicine 14 (1986): 4–5; Thomas Forester, Robert F. McNown, and Larry D. Singell, “A Cost Benefit Analysis of the 55 mph Speed Limit,” Southern Economic Journal 50 (January 1984): 631–41; A. Hoskin, “Consequences of Raising the Speed Limit,” Journal of Safety Research 17 (1986): 179–82; James Jondrow, Marianne Bowes, and Robert Levy, “The Optimal Speed Limite,” Economic Inquiry 21 (July 1983): 325–36; D. Solomon, “Accidents on Main
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The Privatization of Roads and High
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This book is dedicated to my fellow
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vi The Privatization of Roads and H
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viii The Privatization of Roads and
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x The Privatization of Roads and Hi
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Acknowledgments Iwould like to than
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Introduction Most people who read t
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Introduction xvii dealing with obje
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1 Free-Market Transportation: Denat
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3 Public Goods and Externalities: T
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Public Goods and Externalities: The
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Page 158 and 159: Public Goods and Externalities: The
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Page 186: Part II Applications
Page 202 and 203: 6 Road Socialism * What are the bes
Page 204 and 205: Road Socialism 185 of the state app
Page 206 and 207: Road Socialism 187 It is in order t
Page 210 and 211: Road Socialism 191 vehicle inspecti
Page 212 and 213: Road Socialism 193 that “The domi
Page 214 and 215: Road Socialism 195 imaginative and
Page 216 and 217: Road Socialism 197 2. Perhaps the p
Page 218 and 219: Road Socialism 199 bouncer, to each
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Page 222 and 223: Compromising the Uncompromisable: S
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Page 236 and 237: Roads and the Immigration Issue 217
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Page 244: The Motor Vehicle Bureau 225 In the
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Page 250 and 251: Privatize Public Highways 231 Thoma
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Homesteading City Streets: An Exerc
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256 The Privatization of Roads and
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13 Transition to Private Roads * Le
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Transition to Private Roads 281 pre
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Transition to Private Roads 283 Blo
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Transition to Private Roads 285 to
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Transition to Private Roads 287 But
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Transition to Private Roads 289 The
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Part IV Critiques
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15 Comment on “Roads, Bridges, Su
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Comment on “Roads, Bridges, Sunli
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16 Roads, Bridges, Sunlight, and Pr
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Roads, Bridges, Sunlight, and Priva
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17 Who is Responsible for Traffic D
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Who is Responsible for Traffic Deat
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20 Aiding and Abetting Road Sociali
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Aiding and Abetting Road Socialism
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Part V Conclusion
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APPENDIX I Annual U.S. Street & Hig
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Appendices 423 It cannot be denied
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The Privatization of Roads and Highways - Ludwig von Mises Institute

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