An Empirical Test of the Offset Hypothesis

I exploit cross province and time series variation in Canadian mandatory seat belt legislation to empirically test the offset hypothesis. The results of this study offer modest evidence on the existence of offsetting behavior by drivers. Specifically, increased usage of seat belts by drivers suggests that seat belt legislation should have led to a 29% drop in driver fatalities. However, econometric estimates indicate that the introduction of seat belt legislation is significantly correlated with only a 21% decline in driver fatalities. Further, the use of legislative and non-legislative factors to control for the effects of independent determinants of traffic fatalities is critical, as their omission implies that seatbelt laws are associated with roughly a 32% drop in driver deaths, thus implying an absence of significant offsetting behavior